David M. Einhorn (born November 20, 1968) is an American investor, hedge fund manager, and amateur poker player. He is the founder and president of
Greenlight Capital
Greenlight Capital is a hedge fund founded in 1996 by David Einhorn (hedge fund manager), David Einhorn. Greenlight invests primarily in publicly traded North American corporate debt offerings and equities. Greenlight is most notable for its sho ...
, a "long-short value-oriented hedge fund".
Born in New Jersey, Einhorn graduated from Cornell University, before starting Greenlight Capital in 1996. Over the next decade, the fund experienced annualized returns of 26%, far better than the market. Greenlight Capital's assets under management decreased from approximately US$12 billion in 2014 to about $5.5 billion as reported in July 2018 as the fund was down 11.3% from 2014 through the end of 2017, and a further 34% in 2018. He has received extensive coverage in the financial press for his fund's performance, his investing strategy and his positions.Lindgren, Hugo (June 15, 2008) "The Confidence Man" ''
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
''.
Einhorn was included in '' Time'' magazine's ''Time'' 100 list of "100 most influential people in the world" in 2013. According to Investopedia, his net worth was around US$1.5 billion in June 2019.
Demarest, New Jersey
Demarest is a borough in Bergen County, New Jersey, United States. As of the 2010 United States Census, the borough's population was 4,881,Nicolet High School in
Glendale, Wisconsin
Glendale is a city in Milwaukee County, Wisconsin, United States. It is a suburb of the neighboring Milwaukee. The population was 13,357 at the 2020 census.
Geography
Glendale is located at (43.130060, −87.927719).
According to the United ...
. Einhorn graduated ''
summa cum laude
Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some Sou ...
fraternity
A fraternity (from Latin language, Latin ''wiktionary:frater, frater'': "brother (Christian), brother"; whence, "wiktionary:brotherhood, brotherhood") or fraternal organization is an organization, society, club (organization), club or fraternal ...
at Cornell.
Investment career
Einhorn started
Greenlight Capital
Greenlight Capital is a hedge fund founded in 1996 by David Einhorn (hedge fund manager), David Einhorn. Greenlight invests primarily in publicly traded North American corporate debt offerings and equities. Greenlight is most notable for its sho ...
in May 1996 with $900,000 in start up capital. In May 2002, he gave a speech at the Sohn Investment Research Conference where he recommended shorting a mid-cap financial company called
Allied Capital
Allied Capital was a private equity investment firm and mezzanine capital lender providing debt and equity capital for leveraged buyouts, acquisitions and restructurings of established businesses. Allied operated as a Business Development Compan ...
eventually disclosing that he himself had a substantial short position. The day after the speech the company's stock went down by 20 percent. Einhorn accused the company of defrauding the Small Business Administration while Allied said that Einhorn was engaging in market manipulation, and illegally accessed his phone records using
pretexting
Pretexting is a type of social engineering attack that involves a situation, or pretext, created by an attacker in order to lure a victim into a vulnerable situation and to trick them into giving private information, specifically information that t ...
securities laws
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...
relating to the accounting and valuation of illiquid securities it held. After the incident, Einhorn published a book, ''Fooling Some of the People All of the Time'' regarding this six-year fight. Reviews of the book were generally positive; '' Seeking Alpha'', said of the book: "the case against Allied Capital is laid out to the last detail. Because of the immense amount of data in the book, I would imagine that some readers may want to skip a page here and there. However, the book is by no means dull. This book proves that truth is really stranger than fiction." Einhorn would come to view Allied as a microcosm of market trends: "What we've seen a year later is that Allied was the tip of an iceberg; that this kind of questionable ethic, philosophy and business practice was far more widespread than I recognized at the time ... Our country, our economy, is paying a huge price for that."
Lehman Brothers
In July 2007, Einhorn shorted Lehman Brothers stock, believing that Lehman had massive exposures to illiquid real estate investments that were improperly accounted for. He also claimed that they used dubious accounting practices in their financial filings. Einhorn shared his thesis on Lehman in November 2007 at the Value Investing Congress.
When Bear Stearns had to be bailed out by the Federal Reserve in March 2008, Lehman was widely considered to be in a weak financial situation. In a speech at a conference in April, Einhorn announced his Lehman short position.Cyrus Sanati "Erin Callan: the Greta Garbo of Wall Street" DealBook, March 9, 2010. In May, Lehman's CFO Erin Callan held a private teleconference with Einhorn and his staff, who hoped Callan could explain discrepancies they had uncovered since the firm's latest financial filing. Einhorn publicly characterized Callan's responses on the call in a negative light and Lehman stock fell sharply. Callan was fired a few weeks later when Lehman reported a $2.8 billion quarterly loss. Lehman would declare bankruptcy in September 2008.
Microsoft
On May 26, 2011, Einhorn called for
Steve Ballmer
Steven Anthony Ballmer (; March 24, 1956) is an American business magnate and investor who served as the chief executive officer of Microsoft from 2000 to 2014. He is the current owner of the Los Angeles Clippers of the National Basketball Associ ...
, CEO of Microsoft, to step down after Microsoft had been passed by both Google and Apple in
market value
Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or ''fair market value'', although the ...
.
U.K. insider dealing
In January 2012, the U.K. Financial Services Authority (FSA) fined Einhorn and Greenlight Capital $11.2 million for trading on inside information. The FSA claimed Einhorn obtained information on the Punch Taverns Plc (PUB) equity fundraising by a broker representing the company prior to public knowledge of the event. Over the following four days, Einhorn sold more than 11 million shares, avoiding a 29.9% stock price collapse and subsequent loss of about £5.8 million."FSA fines hedge fund manager David Einhorn ￡7.2m for insider trading" ''fsa.gov.uk''.
The Financial Services Authority stated'':''
The FSA accepted that Einhorn's trading was not deliberate because he did not believe that it was inside information. However, this was not a reasonable belief. This was a serious case of market abuse by Einhorn and fell below the standards the FSA expects, particularly due to Einhorn's prominent position as President of Greenlight and given his experience in the market. Einhorn is an experienced professional with a high profile in the industry. We expect someone in his position to be able to identify inside information when he receives it and to act appropriately. His failure to do so is a serious breach of the expected standards of market conduct. It is highly damaging to market confidence when privileged shareholders commit market abuse, and the high penalty reflects the seriousness of his breach.
Einhorn called the £7.2m fine "unjust" and "inconsistent with the law" but said he would pay it "rather than continue an arduous fight" The fine was the second largest levied on an individual in the history of Britain's Financial Services Authority.
Green Mountain Coffee Roasters
Speaking at the Value Investing Congress in New York City on October 17, 2011, Einhorn publicly announced his short position in Green Mountain Coffee Roasters stock. Prior to that date, the company's share price had increased more than tenfold since March 2009, the third-biggest gain in the
Standard & Poor's
S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is con ...
Midcap 400 Index. In his presentation Einhorn opined that the market for Green Mountain's new Keurig single-cup coffee brewer was "limited", and that the K-Cup coffee pods for the machine presented a "looming patent issue" for the company. He also said that Green Mountain had a "litany of accounting questions". Following Einhorn's speech Green Mountain's share price fell by 10 percent, closing that day at $82.50.
A few weeks later on November 9, 2011, Green Mountain's quarterly report missed analyst expectations and its stock price plunged to $43.71. The company's CEO Lawrence J. Blanford cited a "number of factors including changes in wholesale customer ordering patterns in our grocery and club channels" for the underperformance of the company. The stock had a run up to 157 in Nov 2014, before its final pricing in the 90's, prior to the company being sold.
Apple Inc.
In early February 2013 Einhorn filed a lawsuit against Apple Inc. in a Manhattan court in order to pressure the company to issue dividend-paying perpetual preferred stock as a means of distributing some of its in cash to shareholders. Later that month Einhorn set what one '' Wall Street Journal'' headline called a "Legal Precedent in Corporate Governance" when the court ruled in favor of Einhorn and determined that Apple's attempt to bundle a measure requiring a shareholder vote prior to issuing preferred shares with a larger shareholder proposal "impermissibly bundles 'separate matters' for shareholder consideration".
Fracking industry
Speaking at the Sohn Investment Conference on May 4, 2015, Einhorn sharply criticized the practice of
hydraulic fracturing
Fracking (also known as hydraulic fracturing, hydrofracturing, or hydrofracking) is a well stimulation technique involving the fracturing of bedrock formations by a pressurized liquid. The process involves the high-pressure injection of "frack ...
or "fracking". He said, "A business that burns cash and doesn't grow isn't worth anything." Specifically, Einhorn announced short positions on Pioneer Natural Resources and
Concho Resources
Concho Resources Inc. was a company engaged in hydrocarbon exploration, incorporated and organized in Delaware and headquartered in Midland, Texas, with operations exclusively in the Permian Basin. In 2021, the company was acquired by ConocoPhi ...
. David Einhorn also joked that Pioneer Natural Resources is a "Motherfracker".
Personal life
In 1993, Einhorn married Cheryl Strauss, a financial reporter and media consultant; they divorced in 2017. He has three children with Strauss. Einhorn lives in Westchester County, New York.
David Einhorn is a
Democrat
Democrat, Democrats, or Democratic may refer to:
Politics
*A proponent of democracy, or democratic government; a form of government involving rule by the people.
*A member of a Democratic Party:
**Democratic Party (United States) (D)
**Democratic ...
,Christopher Keating Greenwich: Ground Zero For Campaign Cash ''Hartford Courant'' (May 26, 2012). and has contributed to Democratic political campaigns, in contrast to his parents, who are Republican donors. In 2012, Einhorn co-hosted a fundraiser for the Keeping America Competitive
PAC Pac or PAC may refer to:
Military
* Rapid Deployment Force (Malaysia), an armed forces unit
* Patriot Advanced Capability, of the MIM-104 Patriot missile
* Civil Defense Patrols (''Patrullas de Autodefensa Civil''), Guatemalan militia and paramili ...
, led by
moderate Republican Moderate Republicans may refer to:
* Within the United States Republican Party:
** Moderate Republicans (Reconstruction era), active from 1854 to 1877
** Moderate Republicans (United States, 1930s–1970s) or Rockefeller Republicans
** Moderate Rep ...
Leonard M. Tannenbaum
Leonard M. Tannenbaum (born August 9, 1971) is the founder and chief executive officer oAFC GammaInc., a commercial mortgage REIT which trades on the NASDAQ exchange under the ticker AFCG. Previously, he was the founder and chief executive offic ...
.
He is reported to drive a
Honda Odyssey Honda Odyssey can refer to three motor vehicles manufactured by Honda:
* Honda Odyssey (ATV), an all-terrain vehicle (1977—1989)
* Honda Odyssey (minivan), a brand of two different Honda minivan models for different markets
** Honda Odyssey (inter ...
.
He is also a founding Master Player of the
Portfolios with Purpose
Portfolios with Purpose ("PwP") is a registered 501(c)(3) non-profit organization founded in 2011. It is an annual virtual stock selection competition in which players of novice and professional experience pay a nominal entry-fee to choose a fiv ...
virtual stock trading contest.
Wealth and philanthropy
As of March 2019, '' Forbes'' magazine reported Einhorn to have an overall net worth of US$700 million.
Einhorn is a major contributor and board member of
the Michael J. Fox Foundation
The Michael J. Fox Foundation for Parkinson's Research is dedicated to finding a cure for Parkinson's disease (PD) established in 2000 by Michael J. Fox. It concentrates on funding research and ensuring the development of improved therapies for ...
. He donated his 2006 poker winnings (over $650,000) to the foundation. He is also on the board of the
Robin Hood Foundation
The Robin Hood Foundation is a charitable organization which attempts to alleviate problems caused by poverty in New York City. The organization also administers a relief fund for disasters in the New York City area. In 2010, a key supporter gave ...
and a contributor to numerous charities in the New York area. In the spring of 2009, as promised in his book ''Fooling Some of the People All of the Time'', Greenlight Capital donated all of the general partner's profits from the shorting of Allied Capital stock (an additional $6 million - Greenlight already donated $1 million in 2005 to Tomorrows Children's Fund - to make a total of $7 million) to three organizations
(Tomorrows Children's Fund, The Project On Government Oversight (POGO) and the Center for Public Integrity (CPI)).
New York Mets
On May 26, 2011, the New York Mets announced that Einhorn had agreed to buy a minority share of the baseball team for $200 million. Einhorn had the option to purchase a majority stake in the Mets after three years if current majority owner
Fred Wilpon
Fred Wilpon (born November 22, 1936) is an American real estate developer and former baseball executive. He was principal owner of the New York Mets from 1987 to 2020.
Early life and education
Wilpon was raised in a Jewish family
and his family could not meet their financial obligations by then. On September 1, 2011, the Mets announced that they had ended negotiations to sell minority ownership to Einhorn.
Poker
In 2006, Einhorn finished 18th in the
2006 World Series of Poker
The 2006 World Series of Poker (WSOP) began on June 25, 2006 with satellite events, with regular play commencing on June 26 with the annual Casino Employee event, and the Tournament of Champions held on June 28 and 29. 40 more events in various ...
Main Event which accounted for $659,730.
In 2012, Einhorn donated his winnings from the
2012 World Series of Poker
The 2012 World Series of Poker was the 43rd annual World Series of Poker (WSOP). It was held at the Rio All Suite Hotel and Casino in Paradise, Nevada between May 27 – July 16, 2012, with the final table of the Main Event delayed until late Oct ...
Big One for One Drop
The Big One for One Drop is a $1,000,000 buy-in No Limit Texas hold 'em tournament hosted at the World Series of Poker (WSOP). Added in 2012, it became the highest buy-in poker tournament in history as well as the largest single payout offered. T ...
Tournament (which had a one million dollar buy in, and in which he won $4,352,000 for his 3rd-place finish) to City Year.
In 2019, Einhorn final tabled the $50,000 No Limit Hold'em High Roller (Event #5), also this at the World Series of Poker, when he finished 9th for $122,551.
As of 2023, Einhorn's live tournament winnings counts for 21st in the New York-area and 156th overall in
USA
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
(both all-time rankings).
Bibliography
* Einhorn, David (2010). ''Fooling Some of the People All of the Time''. Wiley Publishing.