Apple Mulls Einhorn Preferred-Stock Plan But Urges Support for Proxy Measure

Apple Inc. will consider issuing preferred stock as a way of distributing some of the company’s ever-growing stockpile of reserve cash.

The company made the announcement Feb. 7 in a news release issued hours after one of its stockholders, Greenlight Capital Inc., filed a lawsuit against Apple in New York federal court, claiming Apple’s attempt to bundle three proposed amendments to the its articles of incorporation into one proxy item violates securities rules (Greenlight Capital LP et al. v. Apple Inc.).

One of the three amendments would eliminate Apple’s ability to issue preferred stock, which Greenlight President David ...