“Candidly, I do think the likelihood of success is in favor of Greenlight,” Judge Richard Sullivan said in court in Manhattan on Tuesday. Greenlight, controlled by New York-based activist investor David Einhorn, wants to stop voting on a bylaws change it said would “bundle” two separate governance issues and prevent Apple from issuing preferred shares.
Greenlight, owner of about 1.3 million shares of the Cupertino, Calif., company valued around $600 million, wants Apple to issue $50 billion worth of preferred shares with a 4 percent dividend. It claims the bylaw change would prevent that.
Apple’s lawyer, George Riley, of O’Melveny & Myers, argued barring the vote at the Feb. 27 annual meeting would pose “irreparable harm” to Apple. He also repeated prior assertions the bylaw change wouldn’t preclude issuing new shares or other actions determined by the board of directors.
Riley argued a delay would cost Apple $3 million in administrative expenses, which the judge said was “chump change to you, maybe. To a federal judge, that sounds like real money.”
Last week, Apple CEO Tim Cook termed the lawsuit "bizarre" and said management is open to discussing options with Greenlight and other shareholders.
Shares of Apple fell $11.14 to $448.85 in Wednesday trading. They’re down 35 percent from their record high set last September.