Einhorn looking stranded on Apple Island

Greenlight Capital has increased its stake in the tech giant while its peers have been fleeing in droves.

By TheStreet Staff Feb 15, 2013 2:23PM

 Maldives, tropical island with palm trees in middle of ocean copyright Stuart Gregory, Digital Vision, Getty ImagesBy Antoine Garathestreet logo

 

Hedge funds are fleeing Apple (AAPL) shares as famed short seller David Einhorn adds to the underperforming tech behemoth.

 

Such is life for investors stuck on Apple Island, as the company tries to navigate a future in the smartphone and tablet market rife with competition from the likes of Google (GOOG), SamsungMicrosoft (MSFT) and a resurgent BlackBerry (BBRY), formerly known as Research In Motion.

 

As he continues to press a case for returning Apple's growing cash hoard to investors to investors, David Einhorn, of hedge fund Greenlight Capital Management, is adding to his investment in the iPhone and iPad pioneer.

 

Einhorn now owns 1.3 million shares according to his latest 13F filing with the Securities and Exchange Commission, up from the third quarter, when he owned 1.09 million shares.

 

In addition to the 1.3 million share stake, Einhorn owns the right to purchase another 275,000 shares via call options, SEC filings show.

 

Einhorn's increasing stake in Apple, as the outspoken hedge fund manager makes the case to investors and management to "unlock the value on Apple's balance sheet," comes at a time when his hedge fund counterparts are fleeing in droves.

 

According to a flurry of Thursday filings, hedge funds are liquidating shares in the tech giant, which remains the largest company in Silicon Valley and the second largest company in America, even after six-month share losses of over 25%.

 

Hedge funds Discovery Capital Management and Viking Global Investors sold over a million Apple shares in the fourth quarter of 2012, SEC filings show, avoiding year-to-date share losses in excess of 12%.

 

Other hedge funds, from Lone Pine Capital to Third Point, liquidated 700,000-plus in shares, the filings show, while highly-watched investors such as Omega Advisors, Eton Park, Jana Partners and Farallon Capital Management also liquidated significant holdings in the quarter.

 

D.E. Shaw, Tiger Global Managment and Citadel sold shares, while retaining significant investments in Apple.

 

Still, Einhorn isn't entirely alone among his hedge fund peers in adding to his Apple holding in spite of the company's recent struggles and falling profit margins.

 

David Tepper's Appaloosa Management bolstered its Apple holdings by nearly 50%, putting its overall investment in the company at nearly 12% of its stock investing portfolio, according to Bloomberg data. That stake addition beat Einhorn's fourth-quarter Apple stock buys. Meanwhile, hedge funds Soros Fund Management and SAB Capital Management added significantly to their Apple holdings.

 

After proving to be a consistent value since the financial crisis, growing to a market cap in excess of $600 billion, investors in Apple now face turbulent waters. As some hedge funds hit the exits, some of Wall Street's top minds are betting on Apple's continued dominance and an eventual recovery in its share price.

 

More from TheStreet.com

1Comment
Feb 18, 2013 9:04AM
avatar

I have a recommendation for anybody who wants one. Throw away your suit, cash in your chips, go to the website Traders Superstore and learn how to trade and then move to South East Asia and live a life that you never dreamed you could live. That's what I am doing now and very happy instead of being in fear all the time and stressed.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
279
279 rated 2
471
471 rated 3
714
714 rated 4
642
642 rated 5
604
604 rated 6
614
614 rated 7
450
450 rated 8
303
303 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
BIDUBAIDU Inc10
CITCIT GROUP Inc NEW10
HPQHEWLETT PACKARD CO10
ITUBITAU UNIBANCO BANCO MULTIPLO S.A.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.