David Einhorn.

When David Einhorn, the poker-playing hedge fund superstar, decides to publicly take on a company whose stock he owns (or has shorted), he usually gets results. Once you establish a reputation for astute calls on Wall Street—Mr. Einhorn’s most famous being his bearish call on Lehman in the spring of 2008—the lemmings can’t help but follow. His latest target: Apple.

Mr. Einhorn’s Greenlight Capital owns more than $600 million worth of Apple, but like others, he thinks the company needs to shake free of a months-long rut. To that end, Mr. Einhorn made clear last week his wish that the company become more flexible in how it thinks about returning cash to shareholders. It’s no small matter, considering that Apple has $137 billion of the stuff sitting on its books, and he sued the company over a possible violation of securities laws last week to make his point. The stock rallied 3 percent on Thursday as a result.

The question of whether or not Apple should do as Mr. Einhorn wishes is an interesting one. On the one hand, Apple has never kowtowed to the needs or wants of Wall Street. On the other, that was a legacy of Steve Jobs, and Mr. Jobs’s successor Tim Cook has to be somewhat concerned about the company’s precarious status as a stock market darling. Returning more cash to shareholders can only help in that regard. Smarty-pants commentators will of course point out that with no external financing needs to speak of, Apple need not pay any mind to Mr. Einhorn or any other institutional investor. But what of its employees? As singular as it may be, the company does have competitors. And when you’re trying to retain your people, a rising stock price beats a falling one.

My bet is that the company caves, but not in the precise way Mr. Einhorn wishes. These are proud people, after all, and there’s no way they’re going to let some guy from New York tell them what to do. But they’re also smart enough to know that $137 billion is too much, and that taking care of shareholders becomes a more nuanced challenge when growth begins to moderate.

In suing Apple, Mr. Einhorn took an issue everyone had already been talking about and put it on the front page. More interesting than the question itself is the fact that nearly every piece of coverage about it—in papers, on TV, in the blogosphere—invoked the label “activist investor” when describing Mr. Einhorn. The term, which is generally applied to hedge fund managers who buy a stake in and then urge companies into some sort of action, has never been explicitly derogatory. But the arrival of said “activism” is usually remarked upon (or typed) in a certain tone, as if someone had just farted at the dinner table.

Why? Perhaps it’s because its most effective (and self-promoting) practitioners have always been the most arrogant that Wall Street has to offer—from 1980s pioneers Carl Icahn and T. Boone Pickens to today’s most prominent, Daniel Loeb (he of the poison-pen letters to CEOs and boards) and his contemporary Bill Ackman. Mr. Einhorn is an unusual exception: he’s so self-effacing, it’s almost hard to believe he works on Wall Street at all, let alone as one of its most successful hedge fund managers.

The unspoken criticism of activist shareholders seems to be that they’re in it for themselves, that their activism is just Wall Street greed in one of its many costumes. That may have been true when it came to the old practice of greenmail, or when hedge funders end up profiting at the expense of others by exploiting companies’ capital structures to their sole advantage. But what about when it’s just another common shareholder like you and me? Such activism is great for everyone, isn’t it? If you own Apple stock in your IRA, Mr. Einhorn’s interests are aligned with yours. So why is this “activism” treated with distaste? Have the public equity markets become so disconnected from reality that no one expects the actual owners of companies to have a say in how they are run?

That’s not to say that activism is itself rare. Pershing Square’s Mr. Ackman has done a great—and captivating—job over the last few months of focusing other investors (and perhaps securities regulators) on a simple question: does multilevel marketing giant Herbalife have many—any?—customers beyond its distributors? If not, it’s a pyramid scheme. And if that is the case, Mr. Ackman’s short position in the stock will pay off big-time. Deride short-sellers all you want, but the man is just asking a question. Why the hell don’t more big investors do that?

(On the subject of Mr. Ackman, did you see the clip of him doing battle with Carl Icahn on CNBC? It’s a classic, and surely the first time I’ve ever told non-business types that a segment from the cable network is a must-see. Mr. Icahn came across as a bit of a jackass, particularly when he berated the reporter for the audacity of asking him questions, but in the end, he’s just an investor who actually tries to force companies into action. And he’s good at it. Thus, a mea culpa: in a previous column on Mr. Icahn and Netflix, I concluded that his agitation probably wouldn’t result in any movement in that stock. Shares of Netflix have, um, doubled since then. Whether or not it had anything to do with Mr. Icahn seems irrelevant at this point. Nice one, you old dog.)

Mr. Einhorn’s complaint is technical—he’s arguing that by bundling a proposal that would prohibit the company from being able to issue preferred stock without a shareholder vote with some other matters, Apple was somehow violating securities laws. But that’s the law for you—sometimes the only way into an issue is through the side door.

There are two reasons Apple’s other large institutional shareholders haven’t tried that door. One: Apple doesn’t give a shit what its shareholders want. It never has. So some investors have surely (and correctly) concluded that it wasn’t worth the effort. Two: institutional shareholders are a bunch of wimps. They don’t apply pressure on outrageous CEO pay, decry stupid mergers or acquisitions, or move for entire boards to be fired in instances of egregious failings of oversight. Most of them, in other words, are a CEO’s dream.

Shouldn’t an owner be able to ask questions about strategy or execution? Even CalPERS—the nation’s largest pension fund—which The Wall Street Journal referred to on Friday as “a loud voice on corporate governance,” isn’t really all that. It only became concerned about the Freedom Group—maker of the AR-15 Bushmaster, the favored gun of mass murderers—after  it was used to savage effect Newtown, Conn. That’s not activism. That’s covering your ass in the court of public opinion. Strangely, CalPERS supports Apple’s desire to restrict itself in the ways it can pay out cash to shareholders. Don’t ask me why.

Of course, if you don’t like what management is doing, you are free to sell your shares and take your money elsewhere. (Why anyone would ever own shares in Wall Street firms themselves, for example, which Andy Kessler described to me once as compensation schemes masquerading as publicly owned companies—“they literally exist to pay out half of their revenue as compensation”—is beyond me. But that’s a discussion for another time.)

And yet we still erupt in spasms of disbelief when activists make a ruckus. But really, people, which is more unbelievable? That some hedge fund guy has the audacity to ask a company to consider a change, or that the rest of us have come to accept the status quo? In an interview with CNBC last week, Mr. Einhorn said that when he finally got Apple CEO Tim Cook on the phone after failing to make headway with the company’s CFO, Mr. Cook told him that he hadn’t even been told about Mr. Einhorn’s concerns. Steve Jobs would be proud.

Blogger Barry Ritholtz chastised Mr. Einhorn in a post last Friday for trying to salvage a poorly timed investment in Apple stock by pushing the company to release more cash, and coined a “law of activist fund managers”—“No matter how much money a company makes for investors, they all eventually want more.” But why shouldn’t they? They own the damn thing.

Mr. Ritholtz knows how to get attention as effectively as the activists he mocks—he titled the post “The Colossal Gall of Bad Apple Investors”—and he decreed that Apple’s decision to sit on that obscene pile of cash is simply part of its genius. In his mind, Mr. Einhorn’s move is not a reasonable request from an owner of more than $600 million of stock but simply the sour grapes of a sore loser. But that’s absurd. By that reasoning, an owner of a stock that has gone up a lot before going down has no right to question management. The fact that we react with surprise when they do says more about us than it does about them.

Cantina Bell's Cantina Bowl

The Observer chuckled yesterday when David Einhorn said he was betting against Chipotle during a presentation at the Value Investing Conference, not at the Greenlight Capital founder's thesis, but because he cited Taco Bell's new "upscale" Cantina Bell chain as a threat to Chipotle's business.

We have a hard time thinking of Taco Bell as anything but a purveyor of "seasoned beef" (sorry) but market researcher YouGov suggests we may be in the minority. According to YouGov's BrandIndex, the South of the Border chain has improved its reputation since introducing the Cantina Bell line in July.

Of course, Taco Bell's score merely recovered to where it was in April, and probably (definitely) no one should be following Mr. Einhorn into his Chipotle short based on the below. Still:

Eat/invest at your own discretion.

That the stock fell on Mr. Einhorn's pronouncement is not surprising—as The Wall Street Journal reported earlier this month, markets typically respond to Mr. Einhorn's public comments on companies as copycats pile into his bets. Indeed, the Einhorn Effect is greater when the hedge fund manager takes a negative view of a company, with a median same-day decline of 4.9 percent on the nine shorts The Journal included in its study.Chipotle, Mr. Einhorn reasoned, is vulnerable to competition—specifically, from Taco Bell's planned upscale chain. That logic is convincing enough, but maybe ... unappetizing? Business Insider has a preview of the new chain, Cantina Bell, and the pictures are perfectly nice. It's just that we've maybe eaten too many 39 cent tacos in our day to fully credit the idea of Taco Bell heading north.

Mr. Einhorn said he remained bearish on Green Mountain Coffee Rosters, a bet he made famous with his presentation at the Value Investing Conference last year, and that he ws long Cigna and General Motors. Those shares also moved with Mr. Einhorn's comments, according to Forbes.

Chipotle shares rebounded after Mr. Einhorn's comments, and are down 4.2 percent.

Peregrine Financial Group founder Russell Wasendorf Sr. pleaded guilty to charges that he stole about $200 million from clients at the futures firm. It was initially believed that Mr. Wasendorf would be set free pending sentencing, the judge ordered the fraudster held behind bars pending a determination on the flight risk posed by the Iowa man. Meanwhile, Wasendorf's son, Russell Jr., sued U.S. Bank for allegedly failing to supervise properly the transfer of customer funds.

Lenders to embattled broadband wireless company LightSquared want permission to go after Harbinger Capital, the hedge fund founded by Phil Falcone, in bankruptcy proceedings, The Wall Street Journal says.

A Morgan Stanley infrastructure fund is tripping over the Volcker rule, which dictates how much of its own capital a bank can risk, according to Reuters. Some senior executives have left the firm rather than accept a smaller share of profits.

SEC Chairman Mary Schapiro is on medical leave, according to The New York Post, and may leave the agency before her term expires in 2014.

Andrew Ross Sorkin relegates the Occupy Wall Street to the dustbin of history, along with the misfits and vagabonds he says diminished the movement.

Harvard grads are earning less than alumni of the South Dakota School of Mines & Technology, says Bloomberg.

Short sellers have more than doubled their bets against Manchester United since the British soccer club that went public in a U.S. offering this summer, according to the Telegraph (h/t Business Insider).

Mr. Hansen

Seattle may not be a sad sack sports town on the level of Cleveland, but its hard to begrudge Emerald City sports fans much of anything, given the largely irrelevant histories of the Seahawks, the Mariners, to say nothing of that time the Supersonics left town for better opportunities in Oklahoma City. So we can only applaud Valiant Capital founder Chris Hansen for celebrating his recent agreement with Seattle's city council to provide $290 million in financing for a new indoor arena by ordering up a round for area sports fans (or, anyone in the area).

"I would just like to thank all of you for all of your support," Mr. Hansen said in a message posted on the website sonicsarena.com:

 Anyone who thinks Seattle doesn’t have great sports fans with incredible passion doesn’t know what they are talking about. As one fan told me at Bumbershoot last weekend, “they can tear out my heart bro, but they can never take my Sonic Soul.” And on that note, I would personally like to buy you all a beer at FX McRory's this Thursday from 5-7. First beer for everyone is on me.

Mazel tov, and drink up: Drink enough, and Seattle residents might forget that they don't actually have a team to put in the arena. Which isn't our point—rather, that life is sometimes miserable for certain New York sports fans, and there are no shortage of local money managers who could write off a few beers, or like, the Mets, as the price of a little goodwill.

Oh, David Einhorn might do it, but by the time he got done negotiating the bar tab, we might find the drinks weren't actually for sale.

Steven A. Cohen, apparently always on the prowl for a franchise, could take after Mr. Hansen and put the cart before the horse, which is to say stop wasting time trying to buy a club and just go ahead and get to know the fans.

A more natural candidate: Tiger Global manager Charles Payson Coleman III. Mr. Hansen and Mr. Coleman share a hedge fund lineage. (Mr. Hansen worked at Blue Ridge Capital—founded by Tiger Cub John Griffin—before striking out on his own.) More importantly, he's a member of the same Payson family that owned the Mets originally—and if you think about it, practically the root of much suffering for which he should probably atone.

(H/t Dealbreaker)

The median home price in Greenwich, Conn. fell 11 percent in the first seven months of the year, according to Bloomberg, as Wall Street cut jobs and pared compensation.

M&T Bank's deal for Hudson City Bancorp shows the Buffalo-based acquirer needs capital to meet new regulatory requirements, writes Peter Eavis in The Times.

Barclays has watched energy traders depart for other firms after the bank placed capped bonuses and limited the amount that traders can risk.

Credit Agricole hopes to reach a deal to sell its Greek unit in the next few weeks, the French lender's CEO Jean-Paul Chifflet said today. Credit Agricole said it lost 370 million euros on the Emporiki in the second quarter.

Depositors are pulling money out of Spanish banks, Reuters reports, and the Spanish recession continues to deepen.

Greece is planning special economic zones that would offer tax and administrative advantages (but which not allow business to pay lower wages).

In the U.S., meanwhile, things are such that investors are giving up on stocks and bonds and placing bets on...the Iraqi Dinar. That's old news, but The New York Post reports that a Dinar trade figures in the plot of Hollywood's Hit and Run, starring Kristen Bell.

In Hong Kong, Occupy protestors defied a court order to evacuate HSBC's headquarters. According to Bloomberg, media outnumbered protestors.

Greenlight Capital founder David Einhorn sank $15 million into a Milwaukee-based venture capital firm—the Capital Midwest Fund, managed by his brother Daniel and father Stephen.

William C. Butcher, former chairman and chief executive officer of Chase Manhattan, died at 85.

The whole letter is up at Dealbreaker; a piece of Mr. Einhorn's summary of the European situation is here:

And:

Or maybe we're projecting our own anticipation of Bob Costas lyrical examination of the cutbacks in Valencia. (Sad stuff, Bob. Men's handball, up next.)

And even if Hal Steinbrenner promptly denied the rumors: "Complete fiction," he told the News, that doesn't mean we can't imagine a new Boss in the Bronx.

Michael Bloomberg: An obvious choice, but we're not sure Mayor Mike has the patience for baseball. We're pretty sure Rudy Giuliani doesn't have the cash, but it'd be fun to watch him scurry around raising money.

Steven A. Cohen: A man who donates a tour of his personal art collection to charity has the ego to step into King George's shoes. The SAC Capital Advisers founder bought one of those token $20 million shares in the New York Mets. That would hardly stop Mr. Cohen from stepping in and...shit-canning A-Rod?

David Einhorn: Except that we always thought he pursued the Mets because he smelled a bargain, or just likes toying with a wounded animals.

Mark Zuckerberg: Knows how to overprice a product!

Zong Qinghou: Because it's about time America's preeminent sports franchise had a Chinese owner, and the fact that Mr. Zong—who is chairman and CEO of China's leading beverage company—is sometimes referred to as "the Chinese Drinks King" leapfrogs Mr. Zong past Liang Wen'gen, who made his fortune in construction machinery.

George W. Bush: Least-literate fan base gets perfect owner in America's least-literate president.

Jared Kushner: Um, free tickets?

Herbalife, you'll remember, is the company that lost nearly one quarter of its value two weeks ago after Mr. Einhorn asked executives some questions about the company's business model on an investors' conference call.

Seriously folks, this seems a bit ridiculous. The guy isn't always right. Steve Ballmer is still running Microsoft. The Wilpons are still ruining the Mets.

UPDATE: Herbalife had gained 17 percent when markets closed, which, you know, Mr. Einhorn never said he wasn't shorting the stock.

[Photo by Ethan Miller/Getty Images]

Spain agreed to an independent audit of its financial system as the nation's government seeks to head off concerns that bank bailouts are pushing public finances to the brink of collapse.

Failure to form a governing coalition could prompt a second round of elections in Greece.

The leftist Syriza party reiterated to European officials that it believes the debt deal signed by the previous Greek government is invalid.

Chesapeake Energy faces $1.4 billion in previously unreported liabilities.

David Weber, the SEC's new assistant inspector general for investigations, was placed on leave and banned from entering agency HQ after telling c0lleagues that he wanted to carry a concealed firearm into the office.

Reports surfaced earlier this week that SEC had ordered an independent investigation into complaints of sexual harassment in its inspector general's office.

The Facebook IPO is already oversubscribed, according to Reuters. The offering is generating weaker-than-expected demand, according to Bloomberg.

Yahoo! chief Scott Thompson told top executives that he never submitted a resume or inaccurate information about his background to the company, raising the question of how the inaccuracy wound up in SEC filings.

Morgan Stanley asked hedge fund run by former co-president Zoe Cruz to return funds last month, ahead of Ms. Cruz announcing yesterday that she would close the fund.

Former Lazard CEO William Loomis is back in an advisory role, UBS hired Peter Riccile as global c0-head of real estate, leisure and lodging investment banking and Societe General was said to hire Francis Repka as its CEO for Brazil.

Greenlight Capital founder David Einhorn won the seventh annual Hillel Texas Hold 'Em tournament, helping to raise $500,000 to promote Jewish engagement on college campuses.