David Einhorn’s Greenlight Capital’s Q1 2019 Investor Letter

David Einhorn’s Greenlight Capital just published its Q1 2019 Investor Letter – a copy of which you can download below. In the letter, among other things, the fund disclosed its biggest long positions at the end of the quarter, which were AerCap Holdings, Brighthouse Financial, CONSOL Coal Resources, General Motors, and Green Brick Partners. The most important part of the letter was definitely its harsh critique of Tesla Inc. (TSLA), which the fund has been shorting for a couple of years. David Einhorn wrote that he thinks the company is on the brink of failure seeing its extreme price cuttings, closing of its service centers, serious safety issues, etc. Greenlight Capital also reported return of 11.0% for the quarter trailing the S&P 500 which brought back 13.6%.

“2019 has started off on a good note. The Greenlight Capital funds (the “Partnerships”) returned 11.0% for the quarter, almost reversing the loss in the fourth quarter of 2018. The S&P 500 returned 13.6%, which also almost reversed its fourth-quarter 2018 result.

Nonetheless, it continued to be a challenging environment for our investment style with growth stocks performing much better than value stocks. In the context of this headwind and a sizable short portfolio, we are pleased with the quarterly result.

Last year we only had one position contribute more than 1% to our performance. This quarter we had eight winners that large. Of the six longs we wrote about at year-end, five – AerCap Holdings (AER), Brighthouse Financial (BHF), Deutsche Pfandbriefbank (Germany: PBB), General Motors (GM) and Green Brick Partners (GRBK) – were the biggest gainers. We also had significant gains in Altice USA (ATUS), Tempur Sealy International (TPX) and on our Tesla (TSLA) short. While we did a good job in reducing our short exposure to the most volatile names during the fourth-quarter dip, we still experienced losses on our short Assured Guaranty (AGO)/long Puerto Rico GO bonds position, the Bubble Basket short, and Netflix (NFLX) puts. Overall, our longs performed a little better than the market, our shorts lost money but went up much less than the market, and macro made a small profit. “

You can download a complete copy of Greenlight Capital’s Q1 2019 Investor Letter here:

Greenlight Capital 2019 Q1 Investor Letter