Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Apple CEO Tim Cook Calls Greenlight Lawsuit “Bizarre”


In his first public comments since Apple was sued on the subject, Apple CEO Tim Cook dismissed a lawsuit brought last week by Greenlight Capital concerning a proposal on the company’s proxy statement as “bizarre” and a “silly sideshow.”

Speaking at a Goldman Sachs conference in San Francisco, Cook said Apple won’t make any effort to campaign for the proposal, the second one on Apple’s proxy, though he said he supports it personally, and will vote for it himself. “We’re not going to do a campaign mailing,” he said. “This is a waste of shareholder money, and it’s a distraction.”

Last week, hedge fund Greenlight Capital sued the company, saying the proposal would eliminate preferred stock from the corporate charter. Its CEO, David Einhorn, attacked Apple as having a “Depression-era mentality” about returning cash to shareholders.

Cook said the proposal doesn’t eliminate preferred stock entirely. The proposal, he said, would require that the issuance of any preferred stock would first have to be approved by common shareholders.

However, Cook took a friendlier view toward Einhorn’s preferred stock proposal in general. Echoing a statement Apple issued last week, Cook called Einhorn’s suggestion “creative.”

“We are going to thoroughly evaluate their current proposals,” he told analyst Bill Shope. “We welcome all ideas from all our shareholders, and we are going to thoroughly consider it.”

Einhorn argued last week that the issuance of a perpetual preferred stock would help Apple return more cash to investors than it has so far. Apple’s cash balance, at north of $130 billion as of the end of its most recent quarter, has continued to generated a lot of attention as it has grown over the years.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work