“David Einhorn’s Greenlight Capital Inc. winning a court order blocking an upcoming Apple Inc. (AAPL) shareholder vote increases pressure on the iPhone maker to return some of its growing cash hoard to investors.
U.S. District Judge Richard Sullivan in Manhattan yesterday granted Greenlight’s request to stop a Feb. 27 vote that would require shareholder approval before the company could issue a new class of preferred shares. Following the ruling, Apple said it would pull the proposal from its shareholder meeting.
Einhorn has used the lawsuit to drum up support among fellow investors to get Apple to return some of its $137.1 billion incash and investments back to shareholders. The push comes as Apple’s stock has declined 36 percent from a record in September on concern that growth is slowing.
“It’s a shame that you have to go through the legal system, but we’re happy that there is a real message being sent to management that they should consider an alternative strategy” for the cash, said Keith Goddard, president of Capital Advisors Inc., an Apple investor who supported Einhorn’s lawsuit.
Apple has been grappling with investor criticism about its cash for years. Near bankruptcy before co-founder Steve Jobs returned to the company in 1997, the cash balance swelled from successful products such as the iPod, iPhone and iPad. While the company tried to address the matter last year by announcing a dividend, investors such as Einhorn have been seeking more.