David Einhorn, is the Founder and President of Greenlight Capital Re, Ltd. (NASDAQ:GLRE). In his recent letter to shareholders he talks about Japanese yen, The St. Joe Company (NYSE:JOE) and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR).
He has been predicting the weakness of Yen for quite some time. The currency proved him wrong several times before finally falling 7% to ¥82.79 per dollar. The Japanese economy hasn’t improved much, so a strengthening Yen will make the Japanese firms lose their competitive edge. Many Japanese corporations including NEC, Toshiba, Panasonic and Sony are losing money. The country is running huge trade deficits. Though Einhorn could be short some Japanese securities, he is not the first hedge fund manager to get bearish on Japan.
However, the letter indicated he was short the Yen not Japanese Government bonds, which Kyle Bass has short positions in. We predicted recently that Einhorn ‘was too smart’ to join the Japanese widow maker trade. The Yen we think is over-valued compared to the dollar.
Einhorn continued his criticizism of the Florida-based real estate developer The St. Joe Company (NYSE:JOE) He stated, “Joe continues to carry its mostly vacant commercial real estate at inflated values and its effort to develop its best land through a historic boom has been a cumulative money loser.” David has held a short position in St. Joe since 2007, at a cost basis of around $60 a share. The stock was down as much as 10% today on reaction to the leaked letter.
He also took a swipe the Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Last year GMCR believed that the approaching patent expiration wouldn’t be any problem, but Einhorn has warned that company faces increasing competition and expiring patents. He also noted several accounting issues in the companies financial statements. As it turned out, he had been right on this one as well. Green Mountain shares have fallen nearly 50% since the beginning of this year.
His $7.8 billion hedge fund company posted a 6.8% gain in the first quarter of 2012, and Greenlight Capital is now open to investors for the first time since 2008.
David Einhorn will be speaking at the Value Investing Congress, where he originally detailed his short thesis for GMCR and JOE. Readers can get a massive discount (Savings: $2,200) with the following code N12VW3 Expiration: 6/5/12