In a surprising move today David Einhorn sold about 1.27 million shares of one of his top holdings, Marvell Technology Group Ltd. (NASDAQ:MRVL). The selling was executed between April 3 to April 4.

David Einhorn

The sold shares were just a fraction of Einhorn’s total stake in Marvell Technology Group Ltd. (NASDAQ:MRVL) which is equal to 51.8 million shares. Marvell Technology is a fabless semiconductor company that manufactures systems-on-chip devices.

Marvell Technology Group Ltd. (NASDAQ:MRVL) was Einhorn’s biggest loser for 4Q 2012. Marvell’s price lost more than 50 percent in the last fiscal year. However, Einhorn remains bullish on the company and told his investors that he had bought more shares of the company during the fourth quarter, he added more than 19 million of Marvell shares to his portfolio in Q4.

Einhorn could have taken some profits from this recent selling, at least on the shares he added in the Q4, as MRVL traded around $7-$8 at that time. Greenlight has held a position in Marvell since third quarter of 2011. Marvell Technology Group Ltd. (NASDAQ:MRVL) traded at around $15 two years ago, so the current share price of $10 is a far cry from what it would take to see Greenlight’s top holding return a profit.

Other hedge funds who have a long stake in Marvell Technology Group Ltd. (NASDAQ:MRVL) are D.E Shaw, Renaissance Technologies, Tudor Investment and Two Sigma Investments. However their stakes are much smaller compared to Greenlight’s.

Last year the court ruled against Marvell and the jury came out with a $1 billion verdict on grounds that Marvell had infringed upon patents held by Carnegie Mellon University. David Einhorn was unimpressed by the enthusiastic amount given by the jury and expected that it would be dialed down by the appeals court.

David Einhorn sees massive upside here, and thinks that the market is not pricing in Marvell’s innovative product transition.