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Einhorn’s Greenlight Fell 6% in October, Paring Gains for Year

Katia Porzecanski and Simone Foxman

(Bloomberg) -- David Einhorn’s Greenlight Capital had a losing month in October, paring gains for this year to 16%.

Greenlight, which follows a value-oriented strategy, fell 6.3% across its hedge funds in the month, according to an update seen by Bloomberg. The S&P 500 Index returned about 2.2% with dividends reinvested, while value stocks gained about 1%.

Einhorn, who oversaw $12 billion at his firm’s peak, is in the midst of a resurgence following his worst year on record in 2018, when his main fund lost 34%. The hedge fund manager, who has remained committed to his strategy of buying beaten-down stocks while shorting growth companies, vowed earlier this year to rework his portfolio by making fewer, more-concentrated investments.

Some of New York-based Greenlight’s short wagers, including Tesla Inc. and Netflix Inc., may have contributed to losses as they rallied in the month. Tesla’s shares surged 31% on the back of a surprise earnings report, paring their decline for this year to 5.4%, while Netflix gained 7.4%.

Of Netflix, Einhorn told investors that the company has “yet to demonstrate a profitable business model,” according to a separate quarterly letter to investors earlier in the week. He said he added a new small long position in Siltronic AG in the third quarter, during which the hedge fund gained 5.6%.

Einhorn’s biggest disclosed long positions as of quarter-end were AerCap Holdings NV, Altice USA Inc., Brighthouse Financial Inc., General Motors Co. and Green Brick Partners Inc.

A spokesman for the firm didn’t immediately reply to a request for comment.

To contact the reporters on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net;Simone Foxman in New York at sfoxman4@bloomberg.net

To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Josh Friedman, Dan Reichl

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