David Einhorn's Greenlight Capital Files Amended 13D on MI Developments (MIM) ~ market folly

Thursday, April 2, 2009

David Einhorn's Greenlight Capital Files Amended 13D on MI Developments (MIM)

In an amended 13D filed with the SEC on March 31st, David Einhorn's hedge fund Greenlight Capital has disclosed a 12.3% ownership stake in MI Developments (MIM). The filing was made because on March 30th, 2009, "counsel to Greenlight Inc. submitted a complaint to the Ontario Securities Commission in an effort to ensure MID’s compliance with applicable minority protection regulations prior to entering into certain transactions with its subsidiary, Magna Entertainment Corporation (“MEC”)." As per the filing, the aggregate amount of shares beneficially owned is 5,655,235.

Since this is an amended 13D filing, indicating an activist stake, there's obviously lots going on behind the scenes in regards to Magna's auction plan and this filing references that. For the rest of Greenlight's portfolio, check out their most recent 13F filing, which details their positions as of December 31st, 2008. Since December, Greenlight has been pretty active, as we've also covered their latest new positions in Jones Apparel (JNY) & Harman (HAR), as well as their most recent 13G filing on Ticketmaster (TKTM). Additionally, we've noted in that Einhorn had picked up positions in gold (GLD) & gold miners (GDX) among other things, as noted in our Greenlight investor letter portfolio update.

Greenlight Capital is a $6 billion fund ran by David Einhorn that specializes in spin-offs and value investing and has seen annual returns of over 20%. Einhorn was -1.5% for February 2009 and sits at -0.03% for the year as of the end of February, as mentioned in our latest hedge fund performance numbers list. Einhorn's name has been popping up in the media a lot over the past year, as he talked about his well documented short position in Lehman Brothers (LEH). And, while that position paid off handsomely for him, it barely offset losses he experienced from other positions. He was caught in the massive Volkswagen short squeeze as he detailed in one of his latest investor letters. Einhorn has also recently detailed the saga between his fund and Allied Capital, a company he shorted, in his book Fooling Some of the People All of the Time: A Long Short Story. It gives you an inside perspective as to how Greenlight constructs and researches their investment theses and we highly recommend it. Greenlight approaches things by identifying mispricings in the markets and going from there.

Taken from Google Finance,

MI Developments is "a real estate operating company engaged in the ownership, management, leasing, development and acquisition of industrial and commercial real estate properties. The Company also own land for industrial development and own and acquire land that would be developed for mixed-use and residential projects."

blog comments powered by Disqus