By Antoine Gara

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), Samsung, Microsoft (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.

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