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David Einhorn Grilled on Greenlight Re Slump While Review Drags On

David Einhorn Grilled on Greenlight Re Slump While Review Drags On

(Bloomberg) -- David Einhorn took it on the chin Tuesday during an earnings call for reinsurer Greenlight Capital Re Ltd.

Two people admonished the hedge fund manager about why the firm’s almost year-long strategic review hasn’t resulted in action. Einhorn is chairman of the Greenlight Re board and oversees investments there.

Cory Reed at Otter Creek Advisors questioned why Greenlight Re rejected a $12.50 a share bid, as reported by Insurance Insider. Einhorn, 51, said he couldn’t comment on the accuracy of the trade publication’s report and has never confirmed it.

“Why don’t you go back and resolicit that bid?,” Reed asked. “Having to sit here and ride this thing down the tubes is very frustrating.” Otter Creek owns a roughly $1.5 million stake in the company, according to data compiled by Bloomberg.

Shares of Greenlight Re closed at $8.33 Monday, down 56% since its 2007 initial public offering. The company has struggled at times on both the investment side and the underwriting part of insurance. Last year, ratings firm A.M. Best & Co. criticized the reinsurer’s underwriting performance, spurring Greenlight Re to announce in May that it would undergo a strategic review.

David Rocker from Rocker Partners questioned why the review has taken so long with so few updates.

Einhorn was unrattled by the questions.

“The strategic review has taken longer than we would have expected it to,” Einhorn said on the call. “I think you can take from that, that whatever our first course of action choice was did not pan out, so now we’re thinking about other courses of action and when we eventually come up with something that we think is the best available choice, we will make it.”

On Monday, Greenlight Re reported its fourth-quarter net loss narrowed to $30.3 million from $80.8 million a year earlier.

Einhorn’s hedge fund, which manages some of the investments for the reinsurer, fell 3.4% in February, bringing its losses for the year to 10.8%, according to an investor update seen by Bloomberg.

--With assistance from Hema Parmar.

To contact the reporter on this story: Katherine Chiglinsky in New York at kchiglinsky@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Alan Mirabella, Peter Eichenbaum

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