David Einhorn should have had the courage of his convictions.
Einhorn told investors on Tuesday that he had been profitably short Herbalife last year, confirming months of speculation that he had bet against the controversial nutritional supplements company.
Sources told The Post that Einhorn had shorted Herbalife earlier in the year. But Einhorn bailed before he could benefit fully.
Herbalife had been falling since May, when Einhorn first questioned Herbalife execs about the company’s disclosures during a conference call.
Sources said that Einhorn covered his Herbalife short well before rival hedge fund manager Bill Ackman launched his $1 billion short attack on the company in December, driving the shares down as much as 40 percent.
Einhorn’s early exit caused him to miss out on some big gains. His Greenlight Capital hedge fund fell 2.7 percent during December.
In contrast, Ackman’s Pershing Square gained 5.9 percent that month, half of it from the Herbalife short. Ackman was up 13.3 percent in 2012 — far outdistancing Greenlight Capital’s 7.9 percent gain.
The news that Einhorn had shorted Herbalife sent the stock down 2.5 percent yesterday, even though the hedgie said he is no longer short.
Einhorn’s usual ability to crush a stock with one of his short calls, a process known as getting “Einhorned,” didn’t help him last year.
In a year-end letter to investors, Einhorn said the average short in his portfolio rose 10 percent last year.
Einhorn’s lackluster 2012 performance was due in large part to his short on Green Mountain Coffee Roasters, which rose 74 percent, wiping out Greenlight’s 2012 profits on the position. Its long bet on Apple also stung.
“Our coffee was too hot, our apple was bruised,” Einhorn wrote in the letter.
Apple’s decline from $677 to $532 forced the firm to give back “all its third-quarter gains and then some,” Einhorn wrote.
mcelarier@nypost.com
This time, Einhorn is ‘Einhorned’
This article
This time, Einhorn is ‘Einhorned’
can be opened in url
http://waterednews.blogspot.com/2013/01/this-time-einhorn-is-einhorned.html
This time, Einhorn is ‘Einhorned’
