Einhorn’s Greenlight Buys Yahoo Shares, Sells UnitedHealth, Hess

David Einhorn’s hedge fund Greenlight Capital Inc. bought shares of Yahoo! Inc. (YHOO) and General Motors Co. (GM) during the third quarter while selling stakes in UnitedHealth Group Inc. (UNH) and Hess Corp. (HES)

Einhorn’s fund purchased a 5.05 million-share stake in Yahoo and added 4.16 million GM shares during the three months ended Sept. 30, according to a filing with the Securities and Exchange Commission today. The hedge fund sold 2.29 million shares of UnitedHealth, 4.59 million in CareFusion (CFN) Corp. and 2.09 million in Hess, representing all its shares in each.

The Yahoo purchase represents Einhorn’s third foray into the stock in the last year and a half. He announced buying a stake in May 2011, sold it two months later, said he bought another in February and said in May he sold again.

Einhorn, known for betting against Lehman Brothers Holdings Inc. before it collapsed in September 2008, last month said investors should buy GM (FM) shares and sell short Chipotle Mexican Grill Inc. In a short sale, traders bet stock prices will fall by borrowing shares, hoping to repay them at a lower price and pocket the difference.

Yahoo, the biggest U.S. web portal, has risen 12 percent since the end of September, while GM added 6.2 percent. UnitedHealth, CareFusion and Hess have dropped at least 5.9 percent since then.

Greenlight returned 3.4 percent in the first half of the year, according to a July 23 letter to investors, a copy of which was obtained by Bloomberg News. Hedge funds gained 1.1 percent, according to data compiled by Bloomberg.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net