GM shareholders shoot down David Einhorn’s radical stock-split plan

Reuters

The agony of defeat.

At General Motors‘ annual shareholder meeting on Tuesday a radical plan from Greenlight Capital, a hedge fund overseen by David Einhorn, was voted down.

Greenlight, which controls more than 3% of GM’s shares, wanted to split the stock into two classes: dividend shares and “capital appreciation” shares.

Over several months, Einhorn vigorously argued that his scheme would unlock billions in value for GM shareholders.

The carmaker’s stock has languished since its 2010 IPO, after a government bailout and bankruptcy in 2009. On Tuesday, shares were trading just $1 above the IPO price of $33.

Greenlight’s slate of three directors was also rejected, according to the carmaker, which conducted a preliminary tally of the voting.

“On behalf of our Board and management, we appreciate the significant support of our shareholders as we continue to transform GM and increase the value of their investment,” GM CEO Mary Barra said in statement.

“We value the perspectives of our shareholders and will continue to actively engage with them – and relevant external — as we enhance our core business, deploy capital to higher-return opportunities, and advance our leadership in the future of personal mobility.”

Greenlight and Einhorn’s proxy battle had turned fierce ahead of the shareholder meeting, which both sides trading shots. Einhorn accused the company of resisting innovation and harboring board members who hold limited stakes in the company, while GM evoked the specter of past “financial engineering” schemes and pointed out that the major credit-rating agencies concluded that Greenlight’s proposal could undermine the automaker’s investment-grade credit status.

GM shares were trading down slightly on Tuesday, to $34.