FORTUNE — Having failed to persuade Apple’s (AAPL) management of the virtues of unloading some of its excess cash through perpetual preferred shares, billionaire hedge fund manager David Einhorn renamed them “iPrefs” and took his case directly to the shareholders Thursday.
In an open conference call accompanied by more than 50 pages of graphs and spreadsheets, he pitched iPrefs as the simplest and most efficient way to “unlock” the value of Apple’s $137 billion cash horde.
Borrowing one of Steve Jobs’ favorite themes, he called iPrefs “the new product Apple doesn’t know it needs.”
The company has innovated brilliantly in hardware, software, retail and supply chain management, he said. The one area Apple has failed to innovate is in managing its capital.
iPrefs, he said, are the innovation Apple needs.
But Einhorn’s argument that iPrefs are simpler than they seem was undercut to some extent by the fact that it took him a full hour to explain how they worked and why they might be better than simply increasing Apple’s dividend or buying back more shares. Yet even then it was clear in the Q&A with shareholders that some of his listeners still didn’t get it.
Moreover Einhorn himself acknowledged that Apple’s common stock would go down when the iPrefs are issued and that a $50 iPref was also likely to lose value as soon as it hit the market — undermining all his subsequent calculations for how much of Apple’s intrinsic value his scheme would unlock.
Still, investors we heard from afterward seem to like the fact that someone with clout and the ear of Apple management was putting pressure on the company to spread some of Apple’s enormous wealth — and in the process increase the value of their severely depressed stock holdings.
Apple’s share price rose during the course of Einhorn’s presentation, but still ended the day down $2.79 (0.62%).
Slides from the presentation are available at www.greenlightcapital.com.