David Einhorn

Ackman tries a new tack

Jim Kim — Tue, 07 Oct 2008 13:38:46 -0400

The world knows William Ackman as one of several big-name fund managers who bet against top financial institutions. He's got some new long investments now, notably Wachovia and AIG, reports TheDeal.com. He discussed both in a recent conference. He's now the 12th largest shareholder of AIG. And he owns a 7 percent stake in Wachovia. We'll see how these bets end up for him. All in all, he's not having that bad a year. Other hedge fund managers who took big stakes against financial services firms are faring much worse, notably David Einhorn at Greenlight Capital. Ackman's Pershing Square is actually up 2 percent for the year. Here's a list of top hedge funds and their performance this year.

For more:
- here's an article from TheDeal.com on Ackman

David Einhorn taking some hard lumps

Jim Kim — Mon, 06 Oct 2008 11:33:57 -0400

David Einhorn's stature soared when he laid a spectacularly winning short bet on Lehman Brothers--in full view of the world. But that glow has faded. Fortune notes that Einhorn's firm, Greenlight Capital, lost 11.5 percent in an offshore fund. Another of its funds is faring equally as bad. He's certainly not the only hedge fund manager to take some lumps in this credit crunch. The fact is that, despite his reputation, Greenlight is not a short fund. It longs a whole lot of stuff that has apparently soured as of late. What really matters here is how fund investors react. You can bet Einhorn and others are working their clients hard right now. This is a time when all your investment in relationships can pay off. The worst thing that can happen is that they head for the doors at once.

For more:
- here's the Fortune article

How to grapple with short sellers?

Jim Kim — Thu, 17 Jul 2008 14:26:04 -0400

Short sellers, who seemed so out-of-favor just a few years ago, have had a great run recently. There certainly have been plenty of targets. The Financial Times raises a timely issue: How do you deal with short sellers if you have been targeted? Lehman Brothers took the let's-talk approach when Greenlight Capital decided to take its famous short position. But then-CFO Erin Callan, who has since decamped for Credit Suisse, couldn't answer some questions to the satisfaction of David Einhorn. The rest is history. But what's the alternative? Hiding behind Reg FD? You ignore the shorts at your peril. Most would likely agree that dialog is the preferred route. Of course, you cannot prepare too much. If your answers are rock solid, you might find an audience willing to close its position and move on. If they still do not get it, good luck. The FT notes one targeted company, Kinder Morgan, put its detailed budget online and mocked the shorts. It worked.

For more:
- here's the Financial Times article

David vs. Lehman

Jim Kim — Wed, 18 Jun 2008 07:31:05 -0400

One commentator is quite sure that David Einhorn of Greenlight Capital has covered his short Lehman Brothers positions. The question is whether he is now long? Article

David Einhorn: Wall Street rock star

Jim Kim — Tue, 17 Jun 2008 07:47:20 -0400

The head of Greenlight Capital has just been given the New York magazine treatment, which solidifies his rock-star status on Wall Street. David Einhorn should be careful, though, because fame is fleeting. This is a good time to pull out all the clichés, like the one about how the brightest stars, by the time they are visible to on earth, have already burned out in space. But at least he can boast solid performance numbers: a 25 percent average annual return over the 12 years Greenlight has been in business. He's also a decent bridge player who took up poker for fun--and won $660,000 at the 2006 World Series of Poker--the article notes. My take is that he's among a handful of managers who are pioneering a new, no-holds barred hedge fund style. It's a high stakes game. A wrong call could well get you indicted.

For more:
- here's the profile

Lehman Brothers can't seem to win

Jim Kim — Wed, 11 Jun 2008 08:45:36 -0400

Lehman Brothers' stock has really tanked the last few days, and you have to wonder how long management can survive. It seems like the top dogs have lost the lost analyst community. Lehman's capital injection plans, as Fortune notes, are going over like a lead bagel. Critics say the de-leveraging needs to go father and the offerings will lead to way too much dilution. The last straw may be the upcoming earnings report. If it even smells of a downside surprise, it will only escalate the tension. So we have to ask, what can Lehman say or do to sate its critics? A mega deal of some sort might do the trick. But that doesn't seem to be forthcoming. Perhaps the shorts will take some profits soon, and allow the board some time to come up with a plan.

For more:
- here's the Fortune article
- David Einhorn seems to be winning support. Commentary
- Analysts remain wary. Article

Is Lehman Brothers' future any clearer?

Jim Kim — Mon, 09 Jun 2008 21:25:18 -0400

This is what a Portfolio commentary says about Lehman Brothers' pre-announcement: "... there's a definite feeling of slow-motion trainwreck here. Still, at least the slow-motion bit is a good thing: It means that Treasury and the Fed have that much more time to find someone with credibly deep pockets willing to buy the bank outright." That's strong stuff (especially in light of the new Fed facilities). But I doubt we're at the Bear Stearns level yet. Still, between now and Monday, when Lehman's second-quarter earnings come out, there's still time for one more round in the long-short war over the stock. The news was not the knock-out punch the company was hoping for. The stock sank nearly 9 percent on the news, but the fight is still on.

For more:
- here's the Portfolio item
- C.V. Starr & Co. is bullish on Lehman Brothers. Article
- David Einhorn is still skeptical. Article | More
- New York Times Columnist: Lehman never saw it coming. Column

Man in the spotlight: David Einhorn

Jim Kim — Fri, 06 Jun 2008 10:03:27 -0400

He's one of Lehman Brothers' highest profile critics, a man who has bet heavily against the firm. A real thorn in the firm's side, particularly for Erin Callan, Lehman's CFO. David Einhorn, 39, of hedge fund Greenlight Capital, has been making the media rounds with his analysis of Lehman Brothers. Of course, he has a lot to gain by creating uncertainty and doubt. Some think he's acting recklessly. In his mind, he's on the side of angels. He's certainly no stranger to this sort of media firestorm. He's got a book out by the way, "Fooling Some of the People All the Time." The SEC once took a look at his activity during his battle with Allied Capital. It's fair to say that his campaign, for better or worse, is working. There is a lot nervousness on the Street right now. One analysts says that counterparty worries have led some firms to reduce trading with the firm, notes MarketWatch. That my friends is ominous.

For more:
- here's Einhorn's latest appearance on CNBC
- here's the MarketWatch article

Lehman to make early earnings announcement?

Jim Kim — Fri, 06 Jun 2008 07:50:00 -0400

Lehman Brothers is in a tough spot. Fairly or not, the shorts have gained the high ground in their war against the stock. Led by David Einhorn of Greenlight Capital, the bears have sown lots of doubt and confusion. The New York Post reports that the firm is considering moving up the date of its earnings announcement, from mid- to early June. The paper reports that the announcement--most expect a loss--will be coupled with an announcement of a rights offering to boost capital levels. This just just adds to the rich brew of uncertainty about the company, Clearly, it has been hunting for capital, scouring the globe. The firm is now in its "quiet period." It needs to come out swinging. But I am not sure what it could announce that would really quell things. You get the feeling that the shorts are getting to ready to close some positions.

For more:
- here's the Post article

What's going on with Lehman Brothers?

Tue, 27 May 2008 06:59:56 -0400

Not too long ago, it looked like the same market rumors that forced Bear Stearns out of business were dogging Lehman Brothers. Fortunately, it was never pushed to the brink; it responded aggressively. But after a respite, the stock is really moving south again. On Friday, it lost nearly 6 percent of its value. Seeking Alpha notes that there are a bunch of shorts betting against the stock. Greenlight Capital hedge fund manager David Einhorn, according to the Wall Street Journal, suggested at the Ira Sohn conference that Lehman has a lot more write downs to come, and questions large, unrealized gains in the first quarter. The short activity seems to be mounting. We'll see how this turns out. It's not a comfortable position, thought it does not appear to be in Bear Stearns territory, yet.

For more:
- here's the Seeking Alpha item
- here's a Fortune article