David Einhorn doesn’t know who Seeking Alpha contributor “Valuable Insights” is. He’s pretty sure VI is a fellow Micron Technology investor. And he’s damned sure (a) that one of VI’s more recent insights was anything but valuable to him, and (b) that he’d like to find out exactly who VI is. And he would appreciate it if a court would help him do so. Read more »
The Greenlight Capital funds, run by hedge fund manager David Einhorn, returned 4.3 percent in the third quarter of 2013, bringing the funds’ year-to-date net return to 11.8 percent, according to a letter to investors seen by Reuters…The letter said that “virtually every long position” that the firm had was profitable in the third quarter, and that it added a “medium-sized long position” in Osram Licht AG . [Reuters]
So David Einhorn won his lawsuit against Apple today, which means that Apple will be forced by a court order to issue $236 billion of “iPref” 4% perpetual preferred stock next week, which I currently see bid at 4.06% in the gray market for $10 million lots.
Hahaha no of course it doesn’t mean that. It means nothing! Except that everyone is kind of peeved. There are some things you could say against Calpers corporate-governance guru Anne Simpson’s position on Apple/Einhorn, but she’s not wrong about this:
“I came off the call deeply puzzled,” Anne Simpson, the pension fund’s director of global governance, told DealBook in an interview after [yesterday's Einhorn] call [pitching iPrefs]. “He finished off by saying you should vote against Proposal 2 to send a message, but he’s in court trying to prevent Proposal 2 from going ahead.”
Right? Read more »
“It is kind of like my grandma Roz. She wanted to hoard money. She would not leave me a message on my answering machine because she did not want to be charged for a phone call. It is really hard to convince somebody with that mindset to change what they’re doing. We have come up with what we think is a win-win situation for Apple where Apple gets to keep its war chest, they get to keep the money, they get to have it for bad times, for growth, for acquisitions.”[Bloomberg TV, earlier]
David Einhorn is suing Apple to make them give shareholders a separate vote over whether shareholders should have a vote over whether Apple can issue preferred stock. I guess that requires some unpacking. Let’s start at the end, with the preferred stock. Here is Einhorn’s plan:
For example, Apple could initially distribute to existing shareholders $50 billion of perpetual preferred stock, with a 4% annual cash dividend paid quarterly at preferential tax rates. … Assuming Apple retains its price to earnings multiple of 10x and the preferred stock yields 4%, our calculations show that every $50 billion of perpetual preferred stock that Apple distributes would unlock about $30 billion, or $32 per share in value. Greenlight believes that Apple has the capacity to ultimately distribute several hundred billion dollars of preferred, which would unlock hundreds of dollars of value per share. Further, Greenlight believes additional value may be realized when Apple’s price to earnings multiple expands, as the market appreciates a more shareholder friendly capital allocation policy.
What do you think? I vote yes. (I mean, I think it’s a good idea. The voting is more complicated.) My math is here and ties closely to Einhorn’s:
The math is super straightforward though it can and should boggle you conceptually if you think about it. Read more »
Q4 Neither The Season Of Light Nor The Season Of Darkness For Greenlight, Not The Best Of Times But Not The Worst Of Times, Either (David Einhorn’s Not Gonna Lie Though, He Could’ve Done Without It)By Bess Levin
Greenlight Capital Fourth Quarter Letter [ValueWalk]
Bloomberg: This Is What Wall Street, And One Former Baywatch Star, Will Be Feasting On Come ThursdayBy Bess Levin
David Einhorn, Greenlight Capital: “Cranberry sauce — not from the can, just cranberries and sugar.” Julian Robertson, Tiger Management: “Wild rice.” Gary Cohn, Goldman Sachs: “Oysters — not shucked by me.” Glenn Dubin, Highbridge Capital Management: “I love turkey. I would love to eat turkey all year round, because I’m a chicken person.” David Hasselhoff, actor: “I miss the dish my mother used to make: it was green beans, with a layer of marshmallows, and corn flakes on top.” [Bloomberg via LaurenTaraLaCapra, RELATED]