Thursday, 29 January 2015
Last updated 6 hours ago
Apr 23 2014 | 11:25am ET
Greenlight Capital’s first-quarter loss has founder David Einhorn in a dark mood.
The New York-based hedge fund lost 1.5% in the first quarter, it told clients yesterday. But much of the missive was dedicated to technology stocks and Einhorn’s warning that the market is facing “our second tech bubble in 15 years.”
“In our view, the current bubble is an echo of the previous tech bubble, but with fewer larger capitalization stocks and much less public enthusiasm,” Einhorn wrote. “What is uncertain is how much further the bubble can expand, and what might pop it.”
In the meantime, he’s steering clear of tech shorts, arguing that such positions are “dangerous” when stock prices have nothing to do with corporate fundamentals.
Einhorn said that Greenlight had closed its short against Chipotle Mexican Grill, a position that lost 33%—“this short gave us gas,” he joked. But Einhorn is sticking with his bet against coffee company Keuring Green Mountain even though it “was our only significant loser” in the first quarter.
Greenlight did exit three other shorts, in Michael Kors Holdings, Fortescue Metals Group and Loblaw Cos., as well as long positions in General motors and Delphi Automotive. The hedge fund bought stakes in retailer Conn’s Inc. and SunEdison Inc.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…