It was shaping up as an especially good episode of The David
Einhorn Show. The founder of the $8.8 billion hedge fund Greenlight Capital was
speaking in May 2012 at his favorite venue, the Ira W. Sohn Investment Research
Conference, held that year at New York’s Lincoln Center, to a packed audience
of money managers eager to hear which stocks were in his cross hairs.
....Then he began to speak about Apple (AAPL). The day before,
Greenlight had disclosed in a regulatory filing that its stake in Apple was
valued at $877 million, almost 10 percent of the fund’s assets. Einhorn had
been buying shares in the company since 2010, initially paying an average of
$248. Now they cost $553, a 123 percent gain, and Einhorn told his audience that
Apple still had plenty of room to grow, with a price-earnings multiple that was
below average. “I have a hard time seeing how anyone ranks Apple as below
average,” Einhorn said, arguing that the company could hit a market
capitalization of $1 trillion.
Unlike the other stocks he had mentioned, shares of Apple
barely budged—King Midas had touched a table, and it stubbornly remained wood.
Partly this was a function of Apple ….
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