Published On: Thu, Aug 21st, 2014

Is LinkedIn in David Einhorn’s Bubble Basket?


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David Einhorn , manager of Greenlight Capital, known for his short-selling strategies, is rumored to have LinkedIn (LNKD) as his next target. In a letter to investors in July, Einhorn wrote, “There are a number of tech stocks caught up in a smaller version of the 1999-2000 internet bubble, and we have created a bubble basket to short them.”

This letter arrived about the time Fed chief Janet Yellen expressed concerned about the overvaluation of some tech stocks. LinkedIn’s shares have risen 36% so far this year, and although the company recently beat earnings estimates by a significant margin, the stock sold off 2% on Tuesday.  There may be concern that LinkedIn, along with other high-flying tech names, might be on David Einhorn’s radar.

So far, the short-interest in the stock has remained unchanged since July at 5.4 million of its 218 million shares.

In the second quarter, Greenlight Capital increased its exposure to small-cap stocks. Einhorn raised his stake in Conn’s (CONN), a retailer with a $1.53 billion market cap, by 7% to 3.5 million shares, about 2% of his portfolio. He initiated a position in Civeo Corp (CVEO), which has a $2.63 billion market cap. Greenlight owns 6.15 million shares with a value of $154 million.

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