Einhorn’s Quarterly Letter: ‘Lots To Say’ About Keurig Green Mountain


In David Einhorn’s latest quarterly letter, he discussed the tech bubble which has been developing for some time, but he also talked about his firm’s major positions. He called the quarter a “quiet” one, as Greenlight Capital’s longs were “modestly profitable,” although the firm’s shorts “lost a bit more” than they made on their longs.

Einhorn addresses Keurig Green Mountain

One of Einhorn’s well-publicized short positions is Keurig Green Mountain Inc (NASDAQ:GMCR). The company’s shares declined more than 2% in morning trading today, although that wasn’t enough to ease the pain for Greenlight on that short position.

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One of the main reasons Keurig Green Mountain Inc (NASDAQ:GMCR) shares have performed so well recently is because of the company’s recent deal with The Coca-Cola Company (NYSE:KO). In Einhorn’s letter, he noted that the short was their “only significant loser.” He also said they have “lots to say” about the strategic partnership of the two companies but that they would “defer that discussion to another time and, perhaps, another format.”

Einhorn discusses Micron, SunEdison

David Einhorn said Micron Technology, Inc. (NASDAQ:MU) was Greenlight Capital’s “only significant winner,” as it gained 9%. He also said they added a number of new long ideas, including major positions in Resona Holdings Inc (TYO:8308) and Sunedison Inc (NYSE:SUNE). On Resona, Einhorn believes the accretion from the company’s buyback of shares from the Japanese government doesn’t seem to be reflected in models created by analysts. He says Resona is “cheap on both an absolute and relative basis.”

The well-known investor pointed to a number of steps Sunedison Inc (NYSE:SUNE) has taken recently. He said the company’s good business had been mixed in with “two bad ones,” which were the company’s manufacturing of wafers for semiconductor companies and assembly of commodity solar modules for developers.

However, he notes that Sunedison Inc (NYSE:SUNE) has exited the assembly business and is working on monetizing its wafer business through an initial public offering. He also expects the company to spin off its Yieldco business through an initial public offering.

Full letter:

Green Light 2014 Letter by ValueWalk