David Einhorn (born March 24, 1968) is President of Greenlight Capital, a “long-short value-oriented hedge fund”, which he began with $1 million in 1996. Greenlight has historically generated greater than a twenty-two percent annualized net return for partners and investors. Einhorn is the Chairman of Greenlight Capital RE, Ltd, a Cayman Islands-based reinsurance company and one of its major shareholders. He is currently in exclusive negotiations to become minority owner of the New York Mets of Major League Baseball.
Born in 1968, he lives in Westchester County, New York with his wife, 2 daughters and son.
His name is most closely associated with short selling, namely borrowing a stock for a period of time and selling it, with the intention of later buying back the shares at a lower price.
His two most famous short positions are Allied Capital and Lehman Brothers.
He is a critic of current investment-banking practices, saying they are incentivized to maximize employee compensation. He cites the statistic that investment banks pay out 50 percent of revenues as compensation, and higher leverage means more revenues, making this model inherently risky.
Einhorn was a director at New Century Financial Corp., a major subprime mortgage lender, between March 2006 and March 2007. Greenlight Capital held 6.3% of the company’s stock at the time he resigned from the board. In 2010, Einhorn was among 13 former officers and directors of New Century that paid more than $90 million to settle various lawsuits against the company, which filed bankruptcy in April 2007.
Einhorn is a major contributor and board member of The Michael J. Fox Foundation. In 2006, Einhorn finished 18th in the World Series of Poker main event and donated his entire winnings of $659,730 to the foundation. He is also on the board of Robin Hood and a contributor to numerous charities in the New York area. In the Spring of 2009, as promised in his book Fooling Some of the People All of the Time, Greenlight Capital donated half its share of profits from their short thesis on Allied Capital (an additional $6 million – Greenlight already donated $1 million in 2005 to Tomorrows Children’s Fund – to make a total of $7 million) to three organizations (Tomorrows Children’s Fund, The Project On Government Oversight (POGO) and the Center for Public Integrity (CPI)).