Greenlight Capital Re, Ltd. (NASDAQ:GLRE)

CAPS Rating: 5 out of 5

The Company is a specialty property and casualty reinsurer, which operates business through its one operating segment, property and casualty reinsurance.

Recs

2
Player Avatar Tastylunch (29.54) Submitted: 11/3/2008 8:15:56 PM : Underperform Start Price: $12.90 GLRE Score: +5.18

Einhorn is a really really smart guy and I've been long greenlight before but here's the problem for the near term1) their hedge fund is down around 27% for the year so far as of this writing2) many investors are asking for redemptions out of hedge funds as they are losing their shorts in other arenas, thus forcing hedgies like Greenlight to liquidate positions in oversold conditions, eventhough the bulk of this happened in October expect this to continue through the end of the year.2) Their business model (long/short) was Fubared but the SEC clamping down on shorts,the very shorts that Einhorn boldy correctly called. He lost for being right.3) They had a "significant" short position in Volkswagen (VLKAY.PK) before it began its dizzying climb, the size of which and their associated losses are currently unknownI think this spells bad news for Greenlight over the next quarter or two. Assuming they can keep investors at home Greenlight will probably be one of the better performers at the other end of this deleveraging superstorm.

Member Avatar Tastylunch (29.54) Submitted: 11/4/2008 11:45:13 AM
Recs: 0

I had a significant typo, "losing their shorts" should have read "losing their shirts"

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