Apple pushed to issue preferred stock
Posted on February 12, 2013 at 22:35 PM EST
Apple pushed to issue preferred stock Eighteen months after succeeding Steve Jobs as CEO, Cook is facing pressure from shareholders who have seen the stock slump more than 30 percent since a September high amid slowing sales growth and tightening competition from rivals such as Samsung Electronics. Greenlight Capital's David Einhorn is suing Apple to block a proposal to eliminate the board's ability to issue preferred stock without seeking shareholder approval, a legal effort Cook described as a "silly sideshow." Einhorn is recommending that Apple issue $50 billion of preferred stock, to be traded alongside common shares and funded by operating cash flow. Slowing growthWhatever the outcome of Greenlight's suit, Apple won't issue preferred stock without shareholder approval, Cook said. Greenlight's effort comes as growth is slowing for the iPhone, Apple's biggest source of revenue and profit, as the smartphone market becomes increasingly saturated. [...] new products such as the iPad mini - priced to challenge tablets from Google and Amazon.com - are eroding profit margins. Asked whether Apple might make a less expensive iPhone to appeal to budget-conscious customers and users in developing countries, Cook pointed to price cuts for older models of the iPhone and iPod.