Einhorn Drops Lawsuit Against Apple
David Einhorn's Greenlight Capital has dropped its lawsuit against Apple regarding a proposal in the company's proxy statement, according to court documents.
Einhorn was suing Apple for Proposal No. 2, which he claimed would prevent the company from distributing preferred stock to shareholders. A U.S. District Court Court for the Southern District of New York granted Einhorn's request for an injunction last week, blocking shareholders from voting on the measure at the company's annual shareholder meeting Wednesday.
(Read More: Court Rules in Favor of Einhorn in Apple Dispute )
Einhorn's lawsuit, though, was part of a broader plan to get Apple to distribute some of its $137 billion cash pile to shareholders. Einhorn has been aggressively pressing Apple to get its stock moving upward after falling 39 percent off its highs.
Einhorn wanted Apple to issue what he called "iPrefs," or preferred shares with a perpetual 4 percent dividend. He argued that, if the proposal had passed, it would have complicated future attempts to issue such securities.
"Apple removed the bundled proposal from the shareholder meeting, therefore resolving the issue," Greenlight said in a statement after the court, acting on its request, ruled to close the case.
Apple did not respond to a request for comment.
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Investors have grown increasingly strident as the cash hoard swells and Apple's share price — which is down 35 percent from its September peak — continues to wallow at levels not seen since early 2012.
Apple's CEO Tim Cook has referred to the lawsuit as "silly sideshow," but has pledged to take seriously Einhorn's and other investors' suggestions on how to unlock more of Apple's cash pile, one of the largest in technology and equivalent to Hungary's Gross Domestic Product.
At its annual shareholders' meeting on Wednesday, Cook conceded that there had been widespread disappointment among investors used to consistent capital gains, and said the board was actively looking for ways to reward shareholders -- but he has not yet revealed any details about its cash strategy.
Major institutional investors have long urged Apple to expand a dividend and share-buyback program that Cook instituted shortly after taking the helm from the late Steve Jobs. But Einhorn's lawsuit in February -- and his simultaneous lobbying in the media -- brought the issue to the fore.
Some analysts say the cash debate has overshadowed what may be a more important long-term issue, whether Apple's product pipeline contains a device that can offset slowing revenue and market share growth.