Greenlight Doubled Yahoo Shares Before Starboard Won Board Seats

  • Internet company up 13% in 2016 amid pressure from activists
  • Einhorn’s hedge fund also boosted Apple stake in first quarter

Greenlight Capital, the $9 billion hedge fund led by David Einhorn, more than doubled its stake in Yahoo! Inc. before the company gave in to pressure by activist Starboard Value and averted a proxy war.

The hedge fund purchased 2.38 million shares in the Internet company, bringing the value of its stake to $162 million as of March 31, according to a filing Monday with the U.S. Securities and Exchange Commission. Yahoo, which reached an agreement that gave Jeffrey Smith’s Starboard control of four board seats last month, has seen its shares rise almost 13 percent this year.

Greenlight also boosted its stake in Apple Inc., the firm’s largest disclosed holding, as the company seeks growth outside of its crown jewel, the iPhone. Einhorn’s firm purchased 1.93 million shares of Apple during the first quarter, bringing the value of its stake to $895 million as of March 31. Shares of the computer and phone maker erased a gain of 3.5 percent in the first quarter to fall almost 11 percent this year.

Greenlight is trying to rebound from a loss of more than 20 percent last year in its main fund. Driven by declines in the stocks of SunEdison Inc., Micron Technology Inc. and Consol Energy Inc., 2015 marked Greenlight’s second-ever losing year since it was started in 1996.

The firm told investors in a letter earlier this month detailing first-quarter performance that it had also established new positions in real estate investment trust Hatteras Financial Corp. and apparel company PVH Corp., in addition to building bigger stakes in Yelp Inc. and American Capital Agency Corp., another REIT.

Money managers who oversee more than $100 million in U.S. equities must file a Form 13F within 45 days of the end of each quarter. The filings list their holdings in stocks that trade on U.S. exchanges, as well as options and convertible debt, but don’t show non-U.S. traded securities or wagers against stocks.

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