Should We Pay Attention to Billionaire David Einhorn’s Long and Short Bets?

“Even at lower commodity prices, capital discipline, cost cutting and much more efficient drilling economics should enable CNX to be cash flow breakeven or better from here on out, which is a significant improvement from our original expectations of about $1 billion of cash burn through 2017. In 2016 we expect CNX to generate cash while growing its production and proved developed reserves. There are very few midsize energy companies achieving similar success. And yet, CNX trades as if it is at the cusp of financial distress. Of course, we wish we were entering the position now rather than at the higher prices we paid,” the fund back in October 2015.

This year, Einhorn might take a different approach and either pitch Consol Energy as a long idea to put the stock in the spotlight, or he might talk about Sunedison, also a long idea that has been costing Greenlight a lot of money. At the beginning of 2015, Sunedison ranked as one of Greenlight’s largest holdings, but as the stock slid by over 74%, the position ranked on the 21st spot at the end of the last year (the fund also reduced the stake by some 25% in the third quarter). Sunedison is currently trading close to its 52-week low and is considerably down from the low $30s it was hovering around nine months ago. In January, Greenlight got to appoint a representative on Sunedison’s board and said that it had engaged with representatives of Sunedison’s board and discussed the company’s performance, as it revealed in a filing with the SEC. The filing also stated that Greenlight had proposed the amendment of Sunedison’s bylaws to prevent the company from issuing equity without a supermajority vote of the Board. According to the filing, Sunedison held some 27.15 million shares of Sunedison, including warrants and convertible senior notes.

Some of Greenlight’s short picks include the aforementioned athenahealth, Inc (NASDAQ:ATHN) and Pioneer Natural Resources (NYSE:PXD), as well as Keurig Green Mountain Inc (NASDAQ:GMCR) and Mallinckrodt PLC (NYSE:MNK), which the fund mentioned in one of its investor letters.

At the beginning of 2016, Greenlight’s largest position was represented by Apple Inc. (NASDAQ:AAPL), in which the fund held 6.28 million shares, the position amassing 12% of its equity portfolio. It is followed by General Motors Company (NYSE:GM) and Time Warner Inc (NYSE:TWX), in which Greenlight reported ownership of 13.92 million shares and 6.44 million shares, respectively.

Disclosure: none