In this news, we discuss the Greenlight’s Einhorn says tech stocks in bubble, hit top in September.
BOSTON (Reuters) – Technology Shares, which surged for months during the pandemic, likely peaked last month, hedge fund investor David Einhorn wrote on Tuesday, adding that he was prepared for a drop by betting against more names, including second-tier companies and those that have just been listed their stock.
Einhorn, who heads Greenlight Capital, wrote in a letter “we are in the middle of a huge tech bubble,” but noted that “September 2, 2020 was the peak and the bubble has already burst.” Reuters saw a copy of the letter.
Einhorn said he had “adjusted” his portfolio short book with bets on declining stock prices by “adding a new bubble basket” made up mostly of second-tier companies and “the recent IPOs went down. trading at remarkable valuations ”.
Einhorn, who made a timely appeal against Lehman Brothers just months before the bank collapsed, said he prematurely identified what he thought was a bubble in 2016. He announced his first bubble basket – including bets against big robbers like Tesla and Amazon – years ago. Now, he says, “there is a consensus that there is a bubble.”
The signs are clear, Einhorn wrote, citing the race for companies to go public, high volumes of speculative trading instruments and a “parabolic climb to the top.”
One of the strangest signs may be a recent job application Einhorn said he received via email from a 13-year-old who says he has quadrupled his money since February.
Einhorn has not identified the stocks he is betting against.
He expects some stocks to continue to climb and said he has added new names to the portfolio: B2B IT services company Synnex, software company NCR and sensor maker ams AG.
During the quarter, Greenlight was up 5.9% from an 8.9% gain in the broader Standard & Poor’s 500 index.
Reporting by Svea Herbst-Bayliss; Edited by Alexandra Hudson
Original © Thomson Reuters Corporation