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Apple iPrefs: David Einhorn Will Win Because Steve Jobs Is Dead

NEW YORK ( TheStreet) -- David Einhorn executed a smart move Thursday.

By making a completely sane and logical, clear and accessible presentation on his plans for Apple's (AAPL - Get Report) cash, he, ironically, crafted his own version of Steve Jobs' reality distortion field.

Watch Einhorn's Webcast. It's well worth your time. It not only clears up confusion surrounding his preferred shares (iPrefs) proposal, it makes the idea seem so benign, so rational that you would have to be an unreasonable hard-ass like Steve Jobs to be against it.

Every word of his pitch lays out the straightforward case that there's absolutely nothing bad that can happen to Apple by issuing preferred shares and the accompanying dividend. Inaction, in Einhorn's world, portends damage.

It's all so simple. For every share of AAPL common stock you own, you receive one iPref (face value of $50) at no cost to you. It pays 4% -- that's a $2 annual dividend. You can keep your iPrefs or sell them back to the market. Again, there's no risk to Apple, according to Einhorn. The company keeps its cash -- all $137 billion -- using free cash flow to cover the preferred offering.

From a practical standpoint, it's difficult to argue with anything Einhorn says. A crystal clear, almost airtight and sound case. To the pragmatist, this is a no-brainer.

That's the beauty of Einhorn's reality distortion field. Most people will have no objections because, at the end of the day on matters such as these (ones few of us fully understand), it's difficult to effectively articulate the risk of changing Apple's standard operating procedure.

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