Hedge fund manager Einhorn takes Apple campaign to shareholders

SAN FRANCISCO Wed Feb 20, 2013 8:34pm EST

SAN FRANCISCO Feb 20 (Reuters) - Hedge fund manager David Einhorn, who is battling Apple Inc in court as part of a wider effort to get iPhone-maker to share more of its cash pile, will now make a direct appeal to the company's shareholders.

He will host a conference call on Thursday to argue the merits of distributing perpetual preferred stock -- his favored way of rewarding shareholders.

Einhorn's $8 billion Greenlight Capital is seeking an injunction to block a Feb. 27 shareholders' vote on "Proposal 2" in Apple's proxy statement, which would abolish a system for issuing preferred stock at its discretion.

Apple declined to comment on Einhorn's plan to appeal directly to shareholders. Chief Executive Tim Cook last week dismissed the lawsuit as a "silly sideshow".

But Cook said the idea of issuing preferred stock was creative and one that Apple's board was carefully considering, while it ponders other ways to share its $137 billion in cash and securities -- something Wall Street investors have lobbied for for years.

But even as the hedge fund star tries to rally Apple shareholders to his cause, one of Greenlight Capital's own previous investors objected publicly on Wednesday to his tactics.

The Nathan Cummings Foundation, which said it had been a limited partner of Greenlight's through its endowment, said it was "dismayed" that Einhorn was suing Apple to prevent a vote on Proposal 2.

"We very much oppose your decision to enjoin the 2013 annual meeting and the vote on Resolution #2," Simon Greer, President and CEO of the foundation, said in a letter to Einhorn that was obtained by Reuters.

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

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