David Einhorn: Half A Silly Stock Price Is Not Deep Value

In his latest Q4 2021 Shareholder Letter, David Einhorn discusses why half a silly stock price is not Deep Value. Here’s an excerpt from the letter:

A basket of bubble stock shorts contributed during the quarter. We have often remarked that twice a silly stock price is not twice as silly. Conversely, half a silly stock price is not Deep Value. In fact, given the magnitude of the bubble, these stocks still appear silly to us even at half the price… or less.

We have thought the bubble peaked before, but in hindsight it really seems that the top came last February. To the extent that current bubble stock holders have to get replaced by a new set of investors who perform real financial analysis, these stocks could easily get cut in half, again… and fall further from there.

You can read the entire letter here:

Greenlight Capital Q4 2021 Letter