Apple: Pyrrhic Win?
Steve Einhorn, who has been battling Apple’s management over the company’s huge cash horde, won a legal victory yesterday. He’s been trying to use Apple’s annual proxy to get the company to issue preferred stock that would attract income-oriented investors and draw down the company’s cash. The legal decision halts the proxy process because Apple had rolled three items into one vote. This ruling is a small step in the battle. The court decision means that Apple may have to amend its proxy and allow investors to vote on each item separately, including a provision to repeal its authorization to issue preferred stock. As I mentioned in “The Battle over Cash (February 13, 2013),” I don’t think the preferred stock proxy provision has much to do with Apple’s ability to implement Mr. Einhorn’s proposal, if it is so inclined. However, this court decision and the ensuing proxy fight surely grabbed Apple’s attention, and they may be willing to negotiate.