David Einhorn, founder and president of Greenlight CapitalMIKE SEGAR
If you want to see the sort of power a respected hedge fund manager can have on a stock, take a look at St. Joe Co.'s stock chart, your watch and the blog Stocks To Watch Today - in that order.
St. Joe's share price has plummeted about 10 per cent since noon, a time that lines up nicely with a presentation from David Einhorn, head of Greenlight Capital, at the Value Investing Congress in New York on Wednesday. Mr. Einhorn established his reputation with a bearish call on Lehman Brothers prior to its collapse, and that gives him enough credibility among investors to follow his every move.
Now, using a 139-slide presentation, he argues that St. Joe has become overly aggressive with its Florida real estate portfolio - which, from the sounds of it, isn't going so well.
"Personally, I don't know that many people who like to live near the airport," Mr. Einhorn said during his presentation, according to Stocks To Watch Today. "To Paraphrase Clara Peller, 'Where's the beach?'"
I've never had the opportunity of attending a Value Investing Congress, but from the sounds of it, it is an entertaining spectacle. Perhaps too much of a spectacle, given the emphasis on hedge fund managers coming up with compelling, actionable ideas.
"They're fantastic at telling stories, and by the time their presentation is over, you're all but phoning up your broker on the spot, telling him to buy as much as he possibly can," said blogger Felix Salmon. Or, in this case, sell.
David Berman