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Reuters: Einhorn Makes Another Successful Short Bet, This Time with U.S. Steel

June 19, 2012 | About:
Holly LaFon

Holly LaFon

255 followers
David Einhorn, manager of hedge fund Greenlight Capital, has made several outstanding and much-discussed short investments. One has been overlooked, according to Reuters:

Hedge fund manager David Einhorn, best known for his prescient short bet against Lehman Brothers and recently, Green Mountain Coffee Roasters, hasn't received the same attention for another notable bearish call - United States Steel.

The Greenlight Capital (GLRE) manager unveiled his negative critique of U.S. Steel at the Ira Sohn charitable conference on May 16, where more attention was focused on Einhorn's bearish views on industrial goods company Martin Marietta Materials (MLM) and online retailer Amazon.com (AMZN).

Yet it's Einhorn's U.S. Steel (X) call that has outperformed, after the closely watched hedge fund manager zeroed in on the company's poor earnings, high pension costs and the impact of China's slowing demand for iron ore.

As of Monday's close, the steelmaker's stock price was down 23.1 percent since the popular conference, where top hedge fund managers reveal their best investing ideas. Meanwhile, shares of Martin Marietta have lost about 8.5 percent over the same time period and Amazon's stock is down 0.8 percent. Hedge fund managers like Einhorn are not required to disclose their short positions. But it's widely believed that Einhorn's $7.8 billion Greenlight Capital is looking to profit from a drop in the stock price of all three companies.

[b]Einhorn's Call[/b]

The day of the conference, Einhorn's criticisms of Martin Marietta immediately cut about 14 percent off the stock before it recovered a bit that day to close down roughly 8 percent. Shares of [b][b][b][b]U.S. Steel[/b][/b][/b][/b], meanwhile, ended the day down 4.9 percent.

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