Hedge fund manager extraordinaire David Einhorn bet big on Best Buy stock. Then he lost big on Best Buy stock.
In a letter to investors Monday, Einhorn’s Greenlight Capital said it sold off its 2.27 percent stake, or 7.7 million shares, in the Richfield-based consumer electronics giant. Greenlight didn’t disclose its exact loss, but a Star Tribune analysis of Greenlight’s stock purchases indicate the firm’s losses could approach $100 million.
Among the reasons Greenlight decided to liquidate its Best Buy position: the recent departures of former CEO Brian Dunn and chairman/founder Richard Schulze. In April, Dunn suddenly resigned amid allegations he had an affair with a female employee. A subsequent board-led investigation concluded Dunn’s actions were inappropriate and that Schulze knew of Dunn’s behavior but failed to inform other directors. Schulze ultimately resigned.
“As a result, the company has an interim CEO and is trying to come up with a strategy,” the letter said. “We worried that this could lead to additional business disruption so we exited with a loss.”