Einhorn Makes 7.7% in October After Adding to ‘Bubble’ Basket
Einhorn Makes 7.7% in October After Adding to ‘Bubble’ Basket
(Bloomberg) -- David Einhorn’s Greenlight Capital hedge funds rose 7.7% in October -- his best monthly performance all year -- after the value investor added to his short wagers.
Greenlight’s October return pared this year’s losses to 9.6%, according to an investor update viewed by Bloomberg. It was Einhorn’s fourth straight positive month.
“We are now in the midst of an enormous tech bubble,” Einhorn told investors in a letter this week, saying he had added a set of bets against “mostly second-tier companies and recent IPOs trading at remarkable valuations.” He also told clients his working hypothesis was that Sept. 2 was the top and the bubble had already popped.
Homebuilder Green Brick Partners Inc., the primary driver of Einhorn’s gains in the third quarter, was a strong performer in October as well, with shares climbing 11%. The company is benefiting from low interest rates and pandemic-driven demand for single-family detached housing.
Greenlight owns almost half of the company’s stock, according to data compiled by Bloomberg. Einhorn has been affiliated with Green Brick since before it went public and is its chairman.
Einhorn has been working to recoup losses that began in 2015, when the main Greenlight fund fell by 20%. The slump deepened in 2018 with a 34% drop. Last year, Einhorn rebounded with a 14% gain across the funds.
The firm managed $2.6 billion as of Jan. 1, down from $12 billion at its peak.
A spokesman for New York-based Greenlight declined to comment.
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