Shareholder David Einhorn Withdraws Apple Lawsuit
Lawsuit abandonded after Einhorn and Greenlight Capital win injunction against shareholder vote
Apple investor David Einhorn has withdrawn his and Greenlight Capital’s lawsuit against Apple after securing an injunction that prevents the iPhone manufacturer from holding a shareholder vote on the issue of preferential shares.
The company had proposed to limit its ability to issue such shares, which guarantee a regular flat return indefinitely that is paid in preference to ordinary stock, something that would make ordinary shares more sensitive to Apple’s profitability.
Hedge fund manager Einhorn had opposed the move, fearing that if shareholders voted in favour of the proposals, it would be more difficult to unlock the company’s vast cash reserves. A number of shareholders have voiced concerns about Apple’s falling share price and want a better return on their investment to compensate.
Apple lawsuit abandoned
Apple’s share price has been hit by fears that the mobile phone market is saturating and that it has run out of investment opportunities. It currently dominates the tablet market and is the second largest producer of smartphones in the world, but it has faced increased competition in both spheres from the likes of Samsung and Amazon.
CEO Tim Cook has previously branded the Einhorn-led lawsuit a “silly sideshow”, but has stressed that he understands investors’ concerns and urged them to focus on the long term, promising that revenue and profit would increase.
At the firm’s annual shareholder meeting, Cook added that the company was working on new products, but did not reveal any details, something that is unlikely to ease the uncertainty over Apple’s future plans. The company’s next major product is widely believed to be a smart watch, possibly called the iWatch.
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