Hedge fund manager David Einhorn’s Greenlight Capital withdrew its lawsuit against Apple Inc., after winning an injunction last week that blocked the iPhone maker from moving forward with a shareholder vote on a controversial proposal.
Apple had sought to limit its ability to issue preferred shares without a shareholder vote, but Einhorn challenged that in court as part of an effort to unlock more of the company’s $137 billion cash hoard.
U.S. District Judge Richard Sullivan ruled in Einhorn’s favor last week and on Friday granted the motion to withdraw his lawsuit.
Einhorn wanted Apple to issue what he called “iPrefs,” or preferred shares with a perpetual 4 percent dividend. He argued that, if the proposal had passed, it would have complicated future attempts to issue such securities.
“Apple removed the bundled proposal from the shareholder meeting, therefore resolving the issue,” Greenlight said in a statement after the court, acting on its request, ruled to close the case.
Apple did not respond to a request for comment.
Chief Executive Tim Cook pledged to take seriously Einhorn’s and other investors’ suggestions on how to unlock more of Apple’s cash pile.
Investors have grown increasingly strident as the cash hoard swells, and Apple’s share price—which is down 35 percent from its September peak—continues to wallow at levels not seen since early 2012.
At its annual shareholders’ meeting on Wednesday, Cook conceded that there had been widespread disappointment among investors, who are used to consistent capital gains. He said the board was actively looking for ways to reward shareholders, but gave no details on what they were considering.
Major institutional investors have long urged Apple to expand a dividend and share-buyback program that Cook instituted shortly after taking the helm from the late Steve Jobs. But Einhorn’s lawsuit in February—and his simultaneous lobbying in the media—brought the issue to the fore.
Some analysts say the cash debate has overshadowed what may be a more important long-term issue, whether Apple’s product pipeline contains a device that can offset slowing revenue and market share growth.
The case is Greenlight Capital LP, et al., v. Apple Inc., U.S. District Court, Southern District of New York, 13-900.