Hitless Greenlight Posts ‘Nondescript’ First Quarter

Apr 26 2010 | 11:26am ET

It’s baseball season, so bring on the baseball references.

New York-based Greenlight Capital compared its first quarter to a “comfortable 0-for-4” for a baseball player, with its three hedge funds posting distinctly lackluster returns. The firm’s eponymous flagship was up 0.4% on the quarter, while its other two funds, Qualified and Offshore, fell slightly, dropping 0.5% and 1.3%, respectively, while the average hedge fund returned about 3% on the quarter.

“The roughly break-even result did not come from a large loss offsetting a bunch of winners,” the firm wrote in its quarterly letter, obtained by Dealbreaker.com. “Instead, it came from having only two somewhat material winners, CIT Group equity (which appreciated from $27.61 to $38.96 per share during the quarter) and Lanxess (€26.34 to €34.11), very few mall winners but many small losers.”

With only “nondescript” portfolio matters to discuss, Greenlight did write at length about the “yellow journalism” of The Wall Street Journal, taking the newspaper to task about what it called “sensationalist” article about an idea dinner in February that the Journal characterized as “euro-dominated” and that quoted Greenlight chief David Einhorn as saying he was “bullish on gold because of inflationary concerns.”

The story sparked a Justice Dept. probe into allegedly manipulative trading of the euro.

“The discussion of one manager’s view about the euro lasted a total of about three minutes,” Greenlight wrote. “David did not mention gold or inflation—which the Journal reporter probably knew, as she had inquired about CIT. Apparently, our decline to comment left her feeling she had free reign to report whatever she wanted. That is shameful.”

Greenlight said that the Journal has refused to run a correction.

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