New York (HedgeCo.net) – It may have taken ten years for it to fully play out, but David Einhorn and his fund Greenlight Capital got what they wanted: admission that St Joe Co. used accounting practices to overstate its earnings and assets after the financial crisis. The SEC charged St. Joe and five former executives with improper accounting. The charges stem from the company’s refusal to write-down the values of its various properties after real estate prices tumbled during the financial crisis. By failing to take or make the write-downs, the company’s earnings and assets were overstated in 2009 and 2010.

For his part, Einhorn had been short the stock since 2006 and only recently covered that short position during the third quarter. According to an article from Business Insider, Einhorn shorted the stock at $39.90 and covered at $17.17.
While a 57% gain is always nice, Einhorn may have gotten more satisfaction out of the fact that the SEC mentioned his findings in their filing against St. Joe.

Rick Pendergraft
Research Analyst
HedgeCoVest