Investors trip over themselves to hear David Einhorn's stock
picks, and for good reason. Yet, perhaps they would be better
served to avoid some of his calls when it comes to the tech
As President of Greenlight Capital, David Einhorn has amassed a
large fortune in a relatively short period of time. Just over 10
years ago, Einhorn first publicly unveiled his bearish thesis on
Allied Capital, a trade that capitulated him into an elite class of
hedge fund managers.
He followed up that call with a short recommendation on Lehman
Brothers -- just months before the firm collapsed. His 2011 call to
short Green Mountain (NASDAQ:
) has also been widely successful.
But Einhorn isn't just a short seller -- his fund takes many
One of those positions, a fairly significant one as of
Greenlight's (Einhorn's firm) last filing, plunged on Wednesday,
down over 10 percent, and continued to trade lower on Thursday.
A judge ruled Wednesday that Marvell Technology (NASDAQ:
) had violated patents belonging to Carnegie Mellon University and
must pay $1.17 billion in damages. What's worse, the infringement
was deemed "willful" meaning that the damages could ultimately be
In Greenlight's last quarterly filing, the firm held over 32
million shares of Marvell -- a little less than five percent of the
firm's portfolio. This filing is out of date, of course, but
assuming that Einhorn didn't trade out of his position in the last
three months would mean that he might've taken a beating on his
But is it fair to project Einhorn's experience with Marvell to
other tech stocks he likes?
His largest tech pick is Apple (NASDAQ:
), which as of Greenlight's last filing, was a massive stake of
over 1 million shares, more than 12 percent of the firm's
In his most recent appearance on CNBC, Einhorn defended Apple,
arguing that the company could reach one trillion in market cap. He
said that many failed to understand Apple's true business model --
that of a software company, rather than a hardware company.
Einhorn has been an Apple bull for years, so the stock has
likely made him significant money.
But, given Apple's tumble from its September highs, it is likely
to be a losing position for Einhorn in the fourth quarter.
If Greenlight underperforms in the fourth quarter, Einhorn's two
big tech picks, Apple and Marvell, could be significant
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
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