Einhorn an “Anomaly” with Bet Against Yuan

New York (HedgeCo.net) – When China devalued its currency on Tuesday, most investors were not happy as the move sent stocks around the world lower. One of the exceptions to the rule is apparently David Einhorn of Greenlight Capital. According to an article from Bloomberg, Einhorn was bearish on the yuan and when the Chinese government lowered the exchange rate, he was set to benefit.

According to the article, Greenlight stood to make $30.4 million if the dollar rallied 10% against the yuan, or at least that is how the reinsurer was positioned at the end of June. The article went on to quote an unnamed source stating that Einhorn’s hedge funds were holding similar positions to that of Greenlight.

While the funds may have made money off the yuan trade, they also took hits on some of their largest holdings. Greenlight is the largest outside shareholder in SunEdison (NYSE: SUNE), a semiconductor manufacturer specializing in solar energy. SUNE dropped 14.37% on Tuesday. Another of Greenlight’s biggest holdings is Apple (Nasdaq: AAPL) which lost 5.2% on the day.
Even with the losses from SUNE and AAPL, Einhorn may have fared better than most on Tuesday thanks to the bearish bet against the yuan.

Rick Pendergraft
Research Analyst
HedgeCoVest

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