* Greenlight up 0.3 pct in Feb; 3.7 pct for year
* Firm has been involved in activist battle with Apple in
* Loeb's Third Point up 1.3 pct for month
* Jana Partners down 0.5 pct
By Katya Wachtel and Peter Rudegeair
NEW YORK, March 1 In a month when outspoken
hedge fund manager David Einhorn went to battle with Apple Inc
over the best use of the tech company's cash, his $8.8
billion hedge fund appeared to gain little from the effort in
terms of performance.
Einhorn's Greenlight Capital rose a meager 0.3 percent in
February, according to sources familiar with the number. Shares
of Apple are have dropped roughly 5 percent since Greenlight
went activist on the stock in early February.
Meanwhile, the benchmark Standard & Poor's 500 stock index
advanced 1.1 percent last month.
Einhorn, who is one of the $2 trillion industry's closely
watched investors, has been pushing Apple to return some of its
massive cash stockpile to investors in a form of preferred
stock. Greenlight owns roughly 1.3 million shares of Apple, and
it is one of the New York-based firm's largest positions.
The feud between Einhorn and Apple comes at a time that
Greenlight is struggling to keep pace with gains in the broader
Greenlight's flagship fund is up 3.7 percent for the first
two months of the year, compared with a 6.2 percent gain for the
S&P 500 stock index.
In 2012, Einhorn, who specializes in picking stocks to go
long and short, saw his Greenlight fund lag the S&P 500 for the
year, rising 8.3 percent compared with a 13.4 percent gain for
the stock index. Hedge funds on average returned about 6 percent
Einhorn has been a longtime holder and fan of Apple, even
handing out iPod Nanos to investors as a gift in 2011. In 2012,
his fund rode with Apple's stock as it reached an all-time high
of $705.07 last September.
But since then, Apple's share price has fallen hard. The
stock tumbled 24 percent in the latter half of 2012 and many
notable hedge managers including Leon Cooperman and Daniel Loeb
slashed their holdings.
Still, Einhorn has scored some success in his battle with
Apple. The hedge fund won an injunction last week to halt a
shareholder vote on a proposal that could have limited the
company's ability to issue preferred stock.
On Friday, Greenlight dropped its lawsuit after Apple
responded to the judge's ruling by agreeing to redo its proxy so
the vote on preferred stock was not bundled with another
"Apple removed the bundled proposal from the shareholder
meeting, therefore resolving the issue," said Greenlight
spokesman Jonathan Gasthalter.
Einhorn, who has argued for Apple to share more of its $137
billion cash stockpile with investors, wanted the company to
issue what he called "iPrefs," or preferred shares with a
perpetual 4 percent dividend.
So far in 2013, Apple shares have continued to languish,
falling more than 20 percent to close at $441.40 on Thursday.
The stock was down 2.2 percent at $431.64 on Friday afternoon.
At a time when Einhorn added to his firm's Apple holdings in
the fourth quarter, hedge funds reduced their Apple positions by
over 30 percent, according to a Goldman Sachs Group
analysis of fourth-quarter regulatory filings.
American International Group Inc replaced the
technology stock as the hedge fund industry's favorite stock in
the three months through Dec. 31, the first time Apple had been
knocked from pole position in three years.
Daniel Loeb's Third Point, for example, got rid of Apple
stock in the fourth quarter. His flagship Offshore hedge fund
rose 1.3 percent in February, sending yearly returns to 6.1
percent, according to a person with knowledge of the numbers.
Barry Rosenstein's Jana Partners also sold its Apple stake
in the fourth quarter. The fund, which tends to take activist
stakes in companies and push for corporate change, lost 0.5
percent in February, but remains up 4.6 percent for the year.