Einhorn raised Apple stake by nearly 50%
By Tim Bradshaw in San Francisco
David Einhorn’s Greenlight Capital raised its holding in
Apple by nearly 50 per cent in the last three months of last year, according to filings released on Thursday.
Greenlight was one of the few hedge funds to increase its stake in during the fourth quarter. Dan Loeb’s Third Point and others sold down their stakes.
According to the filings, Greenlight – which last week sued Apple as part of a campaign to increase returns to investors – raised its holdings in the company by 46 per cent to 1.6m shares, including shares covered by call options. The filings do not reflect any trades that have been made since the beginning of this year.
Mr Einhorn, Greenlight’s chief, raised his stake several months after approaching Apple’s management last May to put forward his idea to issue perpetual preferred stock.
He has suggested that this new class of stock could pay a 4 per cent yield, unlocking around $30bn in value for shareholders from Apple’s $137bn cash hoard.
Greenlight’s share purchase came during a sharp decline in Apple’s stock price, while other hedge funds changed their positions on the stock.
Third Point, whose chief Mr Loeb played an active role in changes to
Yahoo’s management last year,
sold his entire 710,000-share position in Apple during the fourth quarter.
Smaller stock sales were also made by Leon Cooperman’s Omega Advisors, Thomas Steyer’s Farallon Capital and Barry Rosenstein’s Jana Partners during the period, according to recent filings.
Hedge funds were instrumental in driving Apple’s stock up by more than 70 per cent from the beginning of 2012 to a peak of $702.10 in mid-September. It has since lost as much as 35 per cent of its value, amid concerns about competition and its slowing growth rate.
The turnover in Apple’s shareholder register could indicate that longer-term investors seeking higher yields have increased their positions at a time when its stock has fallen to a 12-month low.
Mr Einhorn’s increase came before further discussions this month with Apple’s chief executive Tim Cook and finance chief Peter Oppenheimer about increasing returns to investors. Mr Einhorn subsequently decided to take legal action against Apple over a proxy proposal upon which shareholders will vote at the annual meeting this month.
Proposal number two, as the clause is known,
would require Apple to gain shareholder approval before issuing preferred stock, which it currently does not require.
Apple said the change, which is backed by investors such as Calpers and advisory groups including ISS, was an improvement to its overall standard of corporate governance. However, Mr Einhorn’s case alleges that “bundling” that vote with other amendments to Apple’s corporate charter breaks SEC rules.
At about the time he was increasing his stake in Apple, Mr Einhorn also bought 39,000 shares in
Google, whose stock price has risen about 18 per cent in the past six months.
....tieni in piedi la baracca finche ' non tornano i capi
