Tag Archives: Greenlight Re

Observations: Tesla, David Einhorn & Turkey

Tesla / Elon Musk

Elon Musk’s “Tesla is somehow going private” Tweet has triggered a lot of comments and discussions (good coverage on FT Alphaville).

For me the main take-away of this story is two fold:

One the one hand, listed equity markets are not the best place to raise equity capital once you are listed. It is OK to raise equity once when you IPO but after that, a company should only pay dividends and buy back stock. Part of the reason that Tesla is shorted so much is the expectation that they will need to raise equity which clearly shows the dilemma of public equity markets these days. Personally, I do think we will see more “Softbank style” large private vehicles which will specialize in providing capital to growing companies and save them the troubles of public equity markets until the company is mature enough. Unfortunately this will lead to the shift of a large part of value creation away from public markets and out of the reach of many “Normal” investors.

Read more

Greenlight Re (GLRE): Poor man’s Berkshire or interesting bet on a David Einhorn Comeback ?

Management Summary:

Greenlight Re is an interesting special situation in my opinion combining 2 bets in one stock:

1. It is a bet that David Einhorn will come back after his worst year ever and 4 years of underperformance
2. Greenlight Re, the Reinsurance company whose investments he manages “mean reverts” at least closer to its historical price book ratio.

This “bet” should be relatively uncorrelated to the overall market and due to the construction of the investment mandate, Einhorn can charge only half of the performance fee for some time.

Disclaimer: This is not investment advise. DO YOUR OWN RESEARCH !!!

Read more