Greenlight Capital, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. The Greenlight Capital funds (the “Partnerships”) returned 8.4% in the second quarter of 2022 and 13.2% for the first half of 2022, compared to a 16.1% decline and a 20.0% decline for the S&P 500 index for the quarter and a half year, respectively. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Greenlight Capital mentioned Twitter, Inc. (NYSE:TWTR) and explained its insights for the company. Founded in 2006, Twitter, Inc. (NYSE:TWTR) is a San Francisco, California-based social network company with a $33.8 billion market capitalization. Twitter, Inc. (NYSE:TWTR) delivered a 2.41% return since the beginning of the year, while its 12-month returns are down by -31.72%. The stock closed at $44.26 per share on August 12, 2022.
Here is what Greenlight Capital has to say about Twitter, Inc. (NYSE:TWTR) in its Q2 2022 investor letter:
“In April, Musk agreed to buy TWTR for $54.20 per share. Then, in May, he appeared to change his mind. The case law on this is quite clear. If it were anyone other than Musk, we would handicap the odds of the buyer wiggling out of the deal to be much less than 5%, or the percentage of bots that might be on Twitter.
But, it is Musk and therefore many believe that the laws again won’t apply. One former judge on the Delaware Chancery Court (where the case is being heard) went on CNBC to speculate that the court might let him out of the deal because Musk won’t respect the judgment, which would embarrass the court. Another variation is the court might rule against him, but TWTR might not be able to enforce the judgment.
Apparently, many people either believe these outcomes are acceptable or, in the alternative, are just the way the world works. We hope it isn’t so. Actually, we can do more than hope. We purchased a position in TWTR at an average of $37.24 per share. At this price there is $17 per share of upside if TWTR prevails in court and we believe about $17 per share of downside, if the deal breaks. So, we are getting 50-50 odds on something that should happen 95%+ of the time…” (Click here to see the full text)
Photo by Claudio Schwarz on Unsplash
Our calculations show that Twitter, Inc. (NYSE:TWTR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Twitter, Inc. (NYSE:TWTR) was in 68 hedge fund portfolios at the end of the second quarter of 2022, compared to 83 funds in the previous quarter. Twitter, Inc. (NYSE:TWTR) delivered a 8.69% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Twitter, Inc. (NYSE:TWTR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
