Home / Business / World Business / Greenlight Capital takes stake in Toshiba

Greenlight Capital takes stake in Toshiba

Hedge fund Greenlight Capital said on Friday that it had added a stake in Toshiba Corp as it expects the stock to rise once the Japanese company resolves uncertainties around its bankrupt Westinghouse unit and the sale of its memory business.

The Japanese conglomerate, whose stock closed at 231.6 yen per share on Friday, may be worth as much as 400 yen per share once it exits a legal dispute with Western Digital Corp over the sale of its flash memory business, Greenlight said. Toshiba sold the unit to help cover losses from Westinghouse’s nuclear reactor business.

In a letter to its investors seen by Reuters, Greenlight said Toshiba’s position would stabilize once it exits money-losing contracts related to the bankruptcy, adding that this should help the company to extract value from the subsidiary’s profitable business.

The hedge fund, run by David Einhorn, also said on Friday its funds dropped 4 percent during the second quarter, calling the quarter a bit of a “head-scratcher.”

Greenlight reported a year-to-date loss of 2.8 percent, compared with a 9.3 percent gain for the S&P 500.

The hedge fund said companies among its long stock holdings exceeded expectations, while short positions mostly disappointed, leading to losses during the quarter.

Greenlight’s five largest equity longs include Bayer AG , AerCap Holdings NV, Consol Energy Inc , General Motors Co and Mylan NV.

It said the short book “proved more costly.” The stocks in its “bubble basket”, including Amazon.com Inc, Tesla Inc , Netflix Inc and athenahealth Inc , gained significantly in the quarter.

Also, the hedge fund said it exited a large number of positions, including long positions in Altice NV, InterActive Corp, Liberty Global Plc and Time Warner Inc.

Short position exits included Mallinckrodt Plc and the credit-rating agencies, the hedge fund said.

Check Also

Germany welcomes Greek bond move

Germany's finance ministry on Tuesday welcomed a move by Greece to sell debt to private investors for the first time in three years, saying Greece now needed to stabilise trust, bolster reforms and complete a third bailout review on time.

Norwegian Air under pressure to boost finances

Norwegian Air, the fast-growing budget airline trying to crack the transatlantic market by undercutting established rivals, faces mounting pressure to control costs and shore up its balance sheet to weather fierce competition.

Leave a Reply

Your email address will not be published. Required fields are marked *