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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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik