Long-Term Returns of David Einhorn’s 5 Activist Targets

In this article, we discuss long-term returns of David Einhorn’s 5 activist targets. You can read our detailed analysis of Einhorn’s activist targets and their historical performance and go directly to read Long-Term Returns of David Einhorn’s Activist Targets. 

5. AerCap Holdings N.V. (NYSE:AER) 

Activist Investment: 2014
Long Term Returns: 200%
S&P 500 Average Gain: 97%

AerCap Holdings N.V. (NYSE:AER) is a company that engages in the lease financing sale and management of commercial flight equipment globally. It also offers aircraft asset management services such as remarketing aircraft and engines. Einhorn initiated a new position in the company in 2014.

For years, Einhorn never had issues with AerCap Holdings N.V. (NYSE:AER) until it entered the market to acquire GE Capital Aviation Services in a $30 billion deal. When the deal closed in 2021, Greenlight Capital also sold its entire stake in the company.

4. CNX Resources Corporation (NYSE:CNX) 

Activist Investment: 2014
Long Term Returns: -75%
S&P 500 Average Gain: 24%

CNX Resources Corporation (NYSE:CNX) is engaged in the management and development of coal operations of CONSOL Energy in Pennsylvania. The company shot to the limelight in 2014 when activist investor David Einhorn acquired stakes in the company, believing it was highly undervalued.

As an activist investor, Einhorn believed it was the right call to spin off CNX Resources Corporation (NYSE:CNX)’s coal business into a separate entity as one of the ways of unlocking value. However, the investment would go bad as the coal industry faced multiple challenges, such as environmental rules, falling demand, low prices, and competition from natural gas and other green energy sources.

CNX Resources Corporation (NYSE:CNX)’s stock fell from $40 in 2014 to less than $10 a share in 2016, resulting in CNX Coal Resources trading below its IPO price of $15 a share. In 2021, the activist investor reduced his stake in the company after the coal miner slumped by 50%.

3. SunEdison

Activist Investment: 2014
Long Term Returns: -90%
S&P 500 Average Gain: 24%

SunEdison is one of the leading solar power companies. The company develops and sells silicon wafers and photovoltaic energy solutions. It operates through two business segments: Semiconductor Material and Solar Energy. It was one of Einhorn’s activist targets in 2014 as he praised its business model of developing and selling solar projects to yields.

Nevertheless, the activist investor believed the company was highly undervalued and needed to unlock its full growth potential. Therefore, he pushed for the company to sell projects to yields at the attractive process and reinvest the proceeds on new projects.

The company would come under pressure in 2015, imploding by nearly 90%. The implosion came after it announced a deal to acquire a residential solar company while it was in a poor cash position.

Greenlight Management pushed for a seat on the board and the ability to buy stock in the company more efficiently. The activist investor was also looking to sell some of the company’s assets or the entire company as one of the ways of unlocking value.

The company would bow to pressure and offered Einhorn board seats as he had amassed a 6.8% stake in the company. The company filed for bankruptcy protection in 2016 after an aggressive binge of debt-dueled acquisitions proved unsustainable.

2. Civeo Corporation (NYSE:CVEO)

Activist Investment: 2014
Long Term Returns: -64%
S&P 500 Average Gain: 15%

Civeo Corporation (NYSE:CVEO) is a company that offers accommodation and hospitality services to Canada’s oil and gas industry. It develops lodges, villages, and mobile assets, including modular, skid-mounted accommodation and central facilities for short- to medium-term accommodation needs. Einhorn took a stake of nearly 10% in the company in 2014.

Following the investment, the activist investor conversed with the board and management, urging them to replace the CEO and leverage the balance sheet to return profits to shareholders. According to the activist investor, the CEO had lost the support and confidence of shareholders.

In regulatory filings, Greenlight Management asked Civeo Corporation (NYSE:CVEO)’s board to take on leverage and make its capital structure more appropriate for a real estate company. Civeo Corp had sought to transform into a real estate investment trust after coming under pressure as oil prices plunged in the second half of 2014.

Einhorn publicly objected to the REIT plan in October and consequently became an activist. He started unloading his stakes in the company in 2015 after conceding in the fourth quarter of 2014 that he had misunderstood the company’s business and how it would react to falling commodity prices.

1. General Motors Company (NYSE:GM)

Activist Investment: 2015
Long Term Returns:  84%
S&P 500 Average Gain: 190%

General Motors Company (NYSE:GM) is a company that designs, builds, and sells trucks, crossovers, cars, and automobile parts. It also provides software-enabled services and subscriptions worldwide. Einhorn’s Greenlight Capital took a new stake in the automaker in 2015, a year after selling off its position in the company.

Following the acquisition, the activist investor started pushing for the creation of two classes of stock and accused the company of misleading credit rating agencies about the plan. The famed short seller investor cranked up the pressure in 2017 on launching a website that encouraged shareholders to vote for the fund’s proposal. The push came after General Motors Company (NYSE:GM) rejected the hedge fund’s push to appoint three directors and divide the common stock into two classes.

Einhorn had reiterated that their proposals would help unlock tens of billions of dollars in shareholders’ value without changing General Motors Company (NYSE:GM)’s business strategy, capital allocation priorities, or financial policy. Nevertheless, Einhorn’s proposals were shot down in 2017 at an annual shareholders’ meeting.

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