This content is from: Portfolio
The Morning Brief: Einhorn's Lunch Call Paying Off; Phil and Lisa Falcone's Yard Sale
David Einhorn was vindicated…at least for one day. Shares of Chipotle Mexican Grill gave investors heartburn Friday when they fell around 15 percent after reporting earnings below Wall Street analyst expections and same store sales that grew slower than in the past. At the recent Value Investing Congress, Einhorn said his hedge fund firm, Greenlight Capital, was shorting the Mexican casual dining company for a number of reasons, including the potential threat from Taco Bell’s recent new menu choices.
Citigroup “carved out” its internal hedge funds and placed them into a separate company controlled by “certain employees” days before Vikram Pandit and John Havens abruptly resigned several days ago. It seems Havens had overseen the operation when it was part of the Citi Capital Advisors division.
Phil and Lisa Falcone’s rags to riches story may be headed back toward rags sometime soon. The one-time high-flying hedge fund manager who in June was charged with fraud by the Securities and Exchange Commission and his wife have reportedly put their Hamptons land up for sale. The 36 acres are listed for $7.995 million. Over the Labor Day weekend, Lisa—who over the years has made a number of appearances in the tabloid press-was arrested and charged with driving while impaired after having crashed her car in Bridgehampton, N.Y.
Two major hedge funds have criticized American airlines parent AMR for not providing sufficient information about their potential bankruptcy restructuring plan. Appaloosa Management LP and Marathon Asset Management LP complained in a letter to AMR Chief Executive Officer Tom Horton that key information is being provided to a limited group of creditors at the expense of input from a broader group of creditors.
A former Securities and Exchange Commission commissioner sits on the board of directors of a hedge fund that was recently accused of inflating its performance. Richard Y. Roberts, who served as a commissioner for the regulator from 1990 to 1995, for the past few years has sat on the board of Yorkville Advisors LLC. Several days ago, the SEC accused Yorkville, founder Mark Angelo and the chief financial officer of lying to their investors about performance and asset values in a scheme to earn higher fees.
SS&C GlobeOp said its Forward Redemption Indicator shows October notifications of 3.19 percent. This was down from 3.76 percent the prior month. SS&C GlobeOp’s data on the GlobeOp platform represents roughly 10 percent of the hedge fund industry.