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David Einhorn to take proxy fight to Apple shareholders

The hedge fund manager suing Apple over its mountain of cash will address investors in a conference call and Webcast on Thursday.

Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Steven Musil
2 min read

David Einhorn, the hedge fund manager waging a legal battle with Apple over its mountain of cash reserves, is taking his case directly to the iPhone maker's investors.

Einhorn's Greenlight Capital, which sued Apple earlier this month over the issue, will host a public conference call and Webcast Thursday to discuss the merits of his proposal for issuing preferred stock to investors.

The conference call and Webcast will begin at 11 a.m. PT. U.S. callers can dial in at 1-800-901-5241 and entering the passcode 62063868#. The Webcast can be accessed by visiting www.media-server.com/m/p/aj2p6kq7.

Greenlight Capital's lawsuit seeks an injunction to block next week's shareholder vote on an Apple proxy proposal that would eliminate its ability to issue "blank check" preferred stock without investor approval. Einhorn contends that Apple illegally bundled that provision with several other items up for investor consideration.

CNET has contacted Apple for comment and will update this report when we learn more.

At an investor conference last week, Apple CEO Tim Cook characterized Einhorn's lawsuit as a "silly sideshow

" and a waste of time and money. However, a judge hearing arguments in the case said yesterday he saw a "likelihood of success " favoring Greenlight Capital.

Einhorn has been critical of Apple's management of cash reserves, which totaled more than $137 billion in cash and securities as of December. Apple has defended its strategy, saying it has already delivered $10 billion of its plan to return $45 billion to shareholders over three years.

As Einhorn was gearing up for tomorrow's meeting, one of his own investors criticized the fund's opposition to Apple's proposal. The Nathan Cummings Foundation wrote in a letter to Einhorn that the campaign undermines Apple shareholder rights.

"By insisting that the company retain the ability to issue preferred shares -- for whatever purpose -- without a shareholder vote, you undermine shareholders' rights," Nathan Cummings Foundation Chief Executive Officer Simon Greer wrote in the letter, which was obtained by Bloomberg.

In response, Greenlight Capital said: "This is a former investor who redeemed. We wish them well."