Einhorn Knee-Caps Green Mountain, Chipotle

Oct 2 2012 | 1:12pm ET

Greenlight Capital's David Einhorn terrorized two companies at one of his favorite venues today, the Value Investing Congress in New York.

The activist hedge fund manager continued to attack Green Mountain Coffee Roasters, a fight he launched a year ago at the VIC. Today, he blasted the company’s management for its lack of transparency and for its failure to recognize the threat posed by competitors. Einhorn said the company's spending was "inexplicable" and that Green Mountain has "unbelievably poor spending discipline."

Einhorn joked that the rumor-mill surrounding his appearances at the VIC has reached a fever-pitch, giving birth to a new verb, "Einhorned," and to many false alarms. He shot down two, at least for now, saying he would not offer "an Herbalife thesis today," and that the media-reported rumors of a bullish bet on Biofuel were wrong.

Analysts trying to guess who he'll take aim at next are "about as useful as replacement referees that decide, 'touchdown Seahawks,'" a reference to the National Football League's recent refereeing debacle.

Einhorn did throw listeners—and those who follow his every word—some fresh meat in the form of Cal-Mex fast-food chain Chipotle, which he said "has a nosebleed valuation that does not leave room for deceleration." Worse for the company, commodity prices are increasing, healthcare costs are about to rise as Chipotle is forced to insure its non-union employees and competition is increasing.

"The biggest challenge comes from a resurgent Taco Bell," Einhorn said, singing that chain's marketing jingle. "Taco Bell has started to eat Chipotle's lunch."

On the other hand, Einhorn had kind words for two other companies, health insurer Cigna and General Motors. The former is the "best performer" among health management organizations and the "fear and uncertainty" stemming from President Barack Obama's healthcare law has already been priced in.

As for the good GM, General Motors as opposed to Green Mountain, it is "much healthier now" and "has a cheap valuation."

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…