Judge Agrees to Speed Up Einhorn Trial Schedule

| Apple Stock Watch

$AAPL's Cash HoardU.S. District Judge Richard Sullivan of the Southern District of New York has agreed to speed up the schedule of a lawsuit between Greenlight Capital and Apple Inc. Apple will now file its response to the suit by the end of day on Wednesday, February 13th, while Greenlight will file its own response by Friday. Oral arguments will be heard on April 19th.

Reuters reported that the request came from Apple with the agreement of Greenlight. Apple argued that the suit could have a a big effect on Apple's annual shareholder meeting, which takes place on February 27th.

Greenlight Capital is a hedge fund led by David Einhorn, a well-respected investor on Wall Street. Mr. Einhorn made his first major fortune betting against Lehman Bros. before that firm's collapse sparked the economic crisis of 2008.

Known mostly for short selling moves like the one mentioned above, Mr. Einhorn has been long on Apple for some time. He remains bullish on Apple, but is suing the company because he wants Apple to be more aggressive with its enormous cash hoard of US$137 billion.

In particular, he wants to stop an Apple management shareholder proposal that would remove the company's ability to issue preferred shares. While that kind of measure is largely seen as being pro-shareholder, Mr. Einhorn believe that Apple is artificially depriving itself of a great vehicle for returning some of its cash

More specifically, with its current bylaws, Apple could issue preferred shares to current shareholders that pays out a significant dividend. Doing so, Greenlight Capital has argued, would let Apple keep its current cash hoard while paying out future profits to shareholders.

The new schedule agreed to by Judge Sullivan means the case could be decided in advance of Apple's annual shareholder meeting.

Shares of $AAPL rose Monday, ending the day at $479.93, a gain of $4.95 (+1.04 percent), on moderate volume of 18.4 million shares trading hands.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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Comments

gnasher729

Interesting. “Greenlight Capital is a hedge fund led by David Einhorn, a well-respected investor on Wall Street. Mr. Einhorn made his first major fortune betting against Lehman Bros. before that firm’s collapse sparked the economic crisis of 2008.”

I thought Lehman Brothers was killed by vultures who destroyed the company by betting tons of money against it. Lehman didn’t spark the crisis, they were the first major victim of huge market manipulation. As a result, I wouldn’t put the label “well-respected” on anybody involved with the cause of that collapse.

geoduck

gnasher729
Exactly right.

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