Einhorn sues Apple, marks biggest investor challenge in years

Source: Reuters

(Reuters) - Apple Inc on Thursday confronted its first major challenge from an activist shareholder in years as hedge fund manager David Einhorn's Greenlight Capital filed suit against the company and demanded that it dole out a bigger piece of its $137 billion cash pile to investors.

The unusual move comes as the world's largest technology company grapples with a tumbling share price, mounting competition in the smartphone and tablet markets, and concerns about its ability to produce new breakthrough products.

Einhorn, a well-known short-seller, said in an interview with CNBC that Apple had a "Depression-era" mentality that led it to hoard cash and invest only in the safest, lowest-yielding securities.

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Einhorn's lawsuit targets a proposal by Apple to eliminate preferred stock from its charter. He urged Apple shareholders to vote against the plan at the company's annual meeting on February 27, and put forward a proposal of his own for the company to issue preferred stock with a perpetual 4 percent dividend.

Read more: http://www.reuters.com/article/2013/02/07/us-apple-greenlight-idUSBRE9160MI20130207