Chillin' out till it needs to be funded
Though David Einhorn has not said so, like the powerful recommendation by the Hoplite Capital CEO for Starbucks which we agree with, David Einhorn is probably considering selling down Amazon after the retailer burst out to $226 almost 10% in a single market window this week, and that may well be his new short. Amazon has historically not been amenable to a short especially as most of the Apple onslaught to $600 bln in market Cap included Amazon on the same side of the bull trade, though an automatic hedge if youa re intending to invest in Amazon is to buy it near the $180 levels
Apparently long positions for Yahoo!, Dell and RIM had also been favored by the manager showing the lacuna in his insight and market appreciation of the companies concerned as none had any long strategies to offer. ( You can check our three year history, we never spoke a single word in their favor, though we have not ruled out Dell yet and Buffet could well latch on to that after his exit from Intel and Coty) David Einhorn has exited the stocks in the latest 13F
David Einhorn’s reservations against Amazon are well understandable. amazon has grown from the first days of the internet to almost $40 bln in topline sales all digital thru the online portal yet it has significantly less profits to offer. The Jeff Bezos company has also not fallen prey to any of the Wall Street tactics though, not using excessive stock based compensation and or other uses of its big price earnings multiple even as it focuses on growing its own continent on the internet, now backed by its cloud offerings
Greenlight Capital could also follow Paulson into the amber zone with one up one down on bets as it prepares to go short on China! (why?) Japan and Norway ( maybe but really, what returns?) Einhorns reactions to Facebook are apparently mixed but then no one knows about how Facebook will perform ont he bourses and as a company right about now except for more spiel on potential which should not be confused with a weak, syrupy pitch that Einhorn is bound to slip into given his hugely short following.
But really, the man is just considering his options for he has to share something with the public at the Ira Sohn conference and he is bang on about good returns in Cairn Energy and Apple as also probably shorts in Dick’s sporting goods and Marietta Materials. We can see less conferences for Mr Einhorn in the future unless Carl Icahn is considering partnerships for more hostile bids though as he steps out on the plate to hit at MLM, Green Mountain(GMCR:US) and even less understandably Herbalife(HLF:US).
I think the big money will return to Herbalife, Green Mountain, Dell and starbucks while ofcourse we already follow the biggest Capital friendly grabs from Disney to Coke to Amazon and Apple that could each yet be a complete phenomenon in themselves. Facebook prices later tonight and with the gfreenshoe and a price of $42 it could well complete the issue as the largest ever IPO.