Hedge fund manager David Einhorn, the founder of $US8 billion Greenlight Capital, has reentered his famous short of Keurig Green Mountain.
“The second time has been a charm as our original thesis is playing out. So far, our third biggest winner this year,” Einhorn wrote in his fund’s third-quarter investor letter.
He shorted the stock again at $US102.08.
Keurig Green Mountain’s share price was last down about 0.90% in the after-hours session at $US54.12.
Einhorn first disclosed his short position in October 2011 at the Value Investing Congress. His 100-plus slide-deck pointed out questionable accounting methods and possible limited demand for its K-Cup products.
But the short position didn’t play out in his favour.
In the third quarter of 2014, Einhorn wrote that he had covered, calling it an “ultimately unsuccessful short.”
“We closed out a number of positions including the remainder of our short position in Keurig Green Mountain (GMCR). While it should be tempting to write an entire book on our experience with this ultimately unsuccessful short (our average sale was at $US47.59 and our average cover was at $US67.02; we had many opportunities to trade this position to a successful result, but failed to do so)…,” the letter from 2014 said.
Even when he exited, he said that he still stood by his thesis about the company’s accounting.
The letter continued: “As far as we can tell, everything we said about the shenanigans is unrefuted and accurate. In any case, time has passed and these misdeeds are now dated. The SEC spent four years looking into the allegations — or, rather, four years passed between when it opened an investigation and closed it.”
Well, now he’s back.
Correction: An earlier version of this post stated that Einhorn reentered the short at $US83.39. It was $US102.08, not $US83.39.