David Einhorn, president of Greenlight Capital, speaks during the Sohn Investment Conference in New York, May 16, 2012.

David Einhorn, president of Greenlight Capital, speaks during the Sohn Investment Conference in New York, May 16, 2012. (REUTERS)

Report: Apple Drops Preferred Stock Voting Proposal

By Features FOXBusiness

Apple dropped a proposal Friday that would have forced the technology giant to seek shareholder approval to issue preferred shares, according to a report by Dow Jones Newswires. The move comes after a contentious battle with hedge fund titan David Einhorn. 

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"We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests," Apple said in a statement to Dow Jones.

Earlier, a federal court judge on Friday granted a bid by Greelight Capital, founded by hedge fund activist David Einhorn, to prevent a vote on an Apple (AAPL) shareholder proposal, after Einhorn objected to a bundling of several proposals into one vote.

The judge issued an injunction blocking a vote on three proposals, including one that would have eliminated Apple’s ability to issue preferred stock without a shareholder vote.

Einhorn held a conference call on Thursday to lay out a plan for Apple to return some of its cash to investors. He called his idea iPrefs, a perpetual preferred share that would pay an annual dividend of $2.

During the call, Einhorn explained that he supported the other two issues that were slated for a vote at Apple’s shareholder meeting. He, however, opposed a proposal that would make shareholders vote on any plan to issue preferred stock.

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The hedge fund manager and Greenlight Capital filed a lawsuit against Apple, alleging the company improperly bundled the three issues together into one proxy vote. Such bundling is a violation of regulatory rules.

Apple CEO Tim Cook called the lawsuit a “silly sideshow.” Earlier this week, the federal court judge gave an indication that Einhorn had a compelling case.

Apple’s shareholder meeting is scheduled for Feb. 27.

Shares of Apple were up $4.81 to $450.87 a share just before Friday’s closing bell.