Last year the billionaire hedge fund manager David Einhorn
predicted that Apple’s market capitalization could hit $1 trillion. He long ago
made Apple one of his hedge fund’s biggest holdings and in a letter dated just
two days ago Einhorn told his investors he had purchased more Apple shares as
the price declined late last year. “We used the lower prices as an opportunity
to repurchase the shares we sold in the third quarter,” Einhorn wrote.
Einhorn’s hedge fund was down 4.9% net of fees in the fourth
quarter of 2012, thanks partly to the performance of Apple’s shares. “Our Apple
was bruised,” he noted to his investors. The question now is, will Apple sink
Einhorn and other hedge funds in 2013?
Despite underperforming the U.S. stock market for four straight
years, the hedge fund industry has found success betting on Apple, enjoying the
stock’s incredible performance as it rose from $200 to $500 and eventually
reaching $700 per share. It has been, by far, the most popular stock among
hedge fund managers, who are paid rich fees by their investors….
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