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Einhorn’s Greenlight Critizized by Investor on Apple

David Einhorn’s Greenlight Capital Inc. was criticized by an investor who said he’s dismayed by the hedge fund’s opposition to an Apple Inc. shareholder resolution.

Greenlight is trying to block a proposal that would keep Apple from issuing preferred shares without shareholder approval, saying the resolution would tie the company’s hands. The effort undermines shareholder rights, the Nathan Cummings Foundation, which invests in Greenlight Capital through a pooled investment vehicle, wrote in a letter to Greenlight President Einhorn. The letter was obtained by Bloomberg.

“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.

Greenlight’s public criticism of the resolution reinvigorated debate over how Apple should use its $137.1 billion in cash and securities. Apple executives, who reinstated dividends last year and are using stock buybacks, have said they’re considering ways to return more of those holdings. Einhorn is urging Apple to issue preferred shares.

Bill Dempsey, Nathan Cummings Foundation’s senior vice president for finance, confirmed the letter, and said that his foundation invests in Greenlight through a so-called fund of funds.

‘Former Investor’

“This is a former investor who redeemed in 2010,” Greenlight Capital said in an e-mailed statement. “We wish them well.”

Einhorn is out of touch with who his own investors are, Greer said in an e-mailed statement.

“We’d be happy to meet with Mr. Einhorn and invite along the other investors in his fund who he seems to dismiss,” Greer said in the statement. “In the meantime, we hope Mr. Einhorn will consider withdrawing his losing bid to deny Apple shareholders their rights.”

Steve Dowling, a spokesman for Apple, declined to comment. He referred to a statement issued by the company earlier this month.

“We will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock,” Apple said Feb. 7. “We welcome Greenlight’s views and the views of all of our shareholders.”

The Nathan Cummings Foundation’s letter to Einhorn was reported earlier by the Financial Times.

Apple declined less than 1 percent to $446.89 at 9:37 a.m. in New York.

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