Apple pulls 'Prop 2' from upcoming proxy vote, says disappointed with court decision
After a U.S. federal judge sided with David Einhorn's Greenlight Capital in a lawsuit seeking the injunction of proposal vote scheduled to be held at Apple's upcoming shareholders meeting, the Cupertino, Calif., company removed the contentious "Prop 2" item from the docket.
Apple announced in a statement on Friday that it will be pulling Prop 2 from its annual meeting slated to take place on Feb. 27, reports AllThingsD. Einhorn sought to block a vote on the proposal as it contained an article which revokes the ability of Apple's board members to issue preferred stock, instead putting that power into the hands of shareholders.
Apple's statement:
Einhorn wants Apple to issue so-called "iPrefs," or perpetual preferred stock that would pay out a quarterly 50 cents dividend equating to $2 per year. He suggests Apple could extend and enhance the program over time to ultimately offer five iPrefs per share of common stock, doubling the current dividend rate to return some $47 billion of company's swelling $137 billion cash hoard.
While Prop 2 has been removed from next week's annual meeting, Apple is not obligated to issue the iPrefs. It is unclear what the company plans to do regarding Einhorn's pressure, but thus far it has been loath to give in to the hedge fund manager's demands.
Apple announced in a statement on Friday that it will be pulling Prop 2 from its annual meeting slated to take place on Feb. 27, reports AllThingsD. Einhorn sought to block a vote on the proposal as it contained an article which revokes the ability of Apple's board members to issue preferred stock, instead putting that power into the hands of shareholders.
Apple's statement:
With the announcement, Apple is conforming to Judge Richard Sullivan's decision issued earlier today.
Einhorn wants Apple to issue so-called "iPrefs," or perpetual preferred stock that would pay out a quarterly 50 cents dividend equating to $2 per year. He suggests Apple could extend and enhance the program over time to ultimately offer five iPrefs per share of common stock, doubling the current dividend rate to return some $47 billion of company's swelling $137 billion cash hoard.
While Prop 2 has been removed from next week's annual meeting, Apple is not obligated to issue the iPrefs. It is unclear what the company plans to do regarding Einhorn's pressure, but thus far it has been loath to give in to the hedge fund manager's demands.
Comments
So they wait a year. No big deal.
If iPrefs doesn't benefit ALL shareholders, vote it down.
You forgot to call for Tim Cook's resignation and that it would never happen under Steve. /s
I now favor Einhorn's idea although I was against it before as long as all shareholders big and small benefit from some form of iShares.
Apple needs to give shareholders some more incentives with all the cash that they have. Apple share price should be around $800 now.
They don't need all that cash and the stock price is depressed right now.
Apple needs to be first class at maintaining share value.
The board should throw us a bone now. It does not have to be iShares as described but something.
Time will tell.
It serves no useful purpose. If Apple wants to give more money back to the shareholders, they can do so simply by increasing the dividend. No need for preferred shares.
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Originally Posted by jragosta
It serves no useful purpose. If Apple wants to give more money back to the shareholders, they can do so simply by increasing the dividend. No need for preferred shares.
The purpose was tax evasion. At least that's what some hedge funds might be doing with the preferred shares. For small shareholders, probably doesn't mean much either way.
I'm a shareholder and I really don't care if Apple issues a dividend or not. Yes, it'd be nice to get some cash from my investment, but there are many other solid dividend issuing companies to invest in. Apple's huge pile of cash gives them purchasing power and a buffer for when their insane popularity starts to wane. Yes, from a quarterly profit, squeeze all the money you can out a company point of view all that cash is "wasted". But truthfully, I trust Apple to take better care of it and invest it more wisely than myself.
- Jasen.
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Originally Posted by drobforever
The purpose was tax evasion. At least that's what some hedge funds might be doing with the preferred shares. For small shareholders, probably doesn't mean much either way.
Actually it does mean something for small share holders. We get the bread crumbs after the big hedge funds eat.
As song as hedge funds see value from growth or dividend, they will invest in the shares and keep up the value of the shares.
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Originally Posted by msuberly
This was really a clear loser argument for Apple. I think it is time for the general counsel to go, or at least the securities lawyer. Now they have to wait a year (or hold a special shareholder meeting) to split the initiative into three separate shareholder proposals.
This is the age of the Internet, if they want be vote before next year they can find a way.
and in the meantime if the board doesn't want to issue any preferred shares there's nothing to force them to do so. So it's not really a lose.
Einhorn probably believes he has more potential to convince a majority of board members of issuing preferred shares than a majority of shareholders.
DRIP. If Apple doesn't have such a plan, your broker will.
Apples board should just send a clear message to the Street.
We are not going to be pushed around by you period
If you don't like the way we run the company then sell.
Apple doesn't need this bs - constantly having to defend itself from attacks in court or through the media. That's the future right there - we have only a small taste of what will come.
Wall St doesn't like us - bfd. Then sell.
I suspect though the board will want to appear to be conciliatory to all shareholders and the above will not happen. But how to appease the voracious and conniving amongst them ? Doesn't seem to be any answer to that - I don't like Einhorn or his tactics but he has certainly brought attention to an issue that was bound to rear it's head sooner or later.
Not sure how it was a clear loser as Apple was required to share the proposal with the SEC and it did not object.
The SEC doesn't review the proposal's content. The government leaves disputes between the shareholders and board of directors to the parties.
Originally Posted by AppleSauce007
Quote:
Apple needs to give shareholders some more incentives with all the cash that they have.
Why? Incentives to do what? Not sell their shares? You'd think running an insanely profitable company would do that.
Quote:
Apple share price should be around $800 now.
Why? Because you want it to be? Not up to you. If you're not satisfied with a stock's gains, the standard protocol, as I recall, is to sell it.
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They don't need all that cash and the stock price is depressed right now.
Do they not? Say you and what forensic accountants? You sound like a poor person who says the affluent don't "need" their money and should share some.
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Apple needs to be first class at maintaining share value. The board should throw us a bone now.
"Throw us a bone"? I like the begging, drooling dog visual. Except the dog is intellectually honest about it.
Quote:
Originally Posted by AppleSauce007
I now favor Einhorn's idea although I was against it before as long as all shareholders big and small benefit from some form of iShares.
Apple needs to give shareholders some more incentives with all the cash that they have. Apple share price should be around $800 now.
They don't need all that cash and the stock price is depressed right now.
Apple needs to be first class at maintaining share value.
The board should throw us a bone now. It does not have to be iShares as described but something.
Time will tell.
And? Is it Apple's fault the share price is what it is? Apple just had the most profitable quarter in it's history, and possibly in any company's history. Stock should generally reflect performance. Apple IS doing its job, and PERFORMING. The fact that the stock is so low has to do with other horse-shit that has nothing to do with the metrics of Apple's performance as a company.
Quote:
Originally Posted by AppleSauce007
Apple share price should be around $800 now.
And it is because of dick head analysts pushing out estimates Apple could never met, making overhyped claims of production issues etc.
not because Apple isn't issuing prefers or handling out free iPads to shareholders or $20 a share dividends every quarter
Apple doesn't have iDIOTS for employees, the only People that want iPREFs are iDIOTS... and David Einhorn wants iPREFS...
well, David Einhorn is an iDIOT, because of this iPREF idea, but that would make him a perfect Candidate for the Republican nominee for the next president of United States of America... (my bias against the republican party is showing)
oh no... Upon further reading he's a self proclaimed Democrat...
http://touch.valuewalk.com/valuewalk/#!/entry/has-david-einhorn-become-a-rightwing-teabagging-libertarian,5089f5e6d7fc7b567031db32/1
he has looks, ideas, money, all that is needed to be the President...
But seriously, David Einhorn for President... The US is going to need some serious mojo to get its financial problems...
Of course one problem I wonder if Al Gore likes David Einhorn...