Key Takeaways
- • Greenlight Capital's funds returned -3.3% in Q3 2026 and -1.5% year to date, net of fees, versus +2.3% and +12.7% for the S&P 500 over the same periods, according to David Einhorn's partner letter.
- • The long book lost 8.5% and the short book gained 7.1% in the quarter, with many long and short positions moving 10% to 25% largely without company-specific catalysts.
- • Greenlight added ADI Global Distribution (ADIG) at an average price of $21.30, about 10x its 2027 earnings estimate, and argued the stock could double earnings over three years.
- • Einhorn criticized the SEC for no longer policing stock promotion claims, citing Anthropic's claimed $30 trillion total addressable market and SpaceX's $28.5 trillion claim against roughly $4 trillion of actual revenue generated by the 191 technology companies in the S&P 1500 plus Amazon, Meta, Google and Tesla.
- • The macro book lost 2.0% in the quarter and 6.0% year to date, driven by a bet that the Federal Reserve would cut rates, which Greenlight reduced by one-third for risk management.
Summary
Greenlight Capital's funds returned -3.3% net of fees in the third quarter of 2026 and -1.5% year to date, trailing the S&P 500, which gained 2.3% in the quarter and 12.7% year to date, according to David Einhorn's letter to investors. Einhorn described the quarter as strange: the S&P 500 advanced while Greenlight's long and short portfolios behaved as if in a bear market. The long book lost 8.5% and the short book made 7.1%. Many positions fell 10% to 25%, mostly without an identifiable catalyst.
DHT Holdings was the only material long winner, rising 45% as tanker charter rates surged amid the wars in Iran and Ukraine. Material long detractors included Brighthouse Financial, down 21% on concerns its pending sale to Aquarian Capital could be blocked by regulators; Fortune Brands Innovations, down 31%; Green Brick Partners, down 17%; and PENN Entertainment, down 31%. On the short side, more than 80% of positions fell during the quarter.
Einhorn addressed AI-related concerns raised by an investor, arguing that AI is unlikely to disrupt the core businesses of Greenlight's largest longs, including Acadia Healthcare, Core Natural Resources, Fluor and Green Brick Partners. He questioned instead the terminal value of large AI providers, which he said are investing trillions of dollars for uncertain returns. He noted Anthropic is expected to IPO at a whispered $2 trillion valuation. Einhorn wrote that Anthropic claimed a total addressable market above $30 trillion, topping SpaceX's claimed $28.5 trillion, and that the TAM claims appear derived from wages for jobs AI might replace. He argued most of any resulting economic benefit would accrue to AI users rather than providers. He also lamented that the SEC no longer scrutinizes such promotional claims.
Greenlight added several small long positions. ADI Global Distribution (ADIG), a low-voltage electrical products distributor recently spun out of Resideo, was acquired at an average of $21.30 and ended the quarter at $17.92; Greenlight expects a cost reduction plan and commercial growth to double earnings within three years. Century Aluminum (CENX), the largest domestic primary aluminum producer, was bought at an average of $41.77 and closed at $35.98, with Greenlight citing tariffs and government support for a planned Oklahoma smelter. Canal+ (London: CAN), a pay TV company that acquired MultiChoice in 2025, was bought at £2.40 and closed at £2.15, trading at about 6x and 5x EBITA on Greenlight's 2027 and 2028 forecasts.
Greenlight exited GoPro, PayPal, Spectrum Brands and an oil futures position. Its macro book lost 2.0% in the quarter after a bet on Fed rate cuts; Greenlight reduced that position by one-third and retains a position extending into next summer. Average exposure was 103% long and 61% short at quarter-end.
DHT Holdings was the only material long winner, rising 45% as tanker charter rates surged amid the wars in Iran and Ukraine. Material long detractors included Brighthouse Financial, down 21% on concerns its pending sale to Aquarian Capital could be blocked by regulators; Fortune Brands Innovations, down 31%; Green Brick Partners, down 17%; and PENN Entertainment, down 31%. On the short side, more than 80% of positions fell during the quarter.
Einhorn addressed AI-related concerns raised by an investor, arguing that AI is unlikely to disrupt the core businesses of Greenlight's largest longs, including Acadia Healthcare, Core Natural Resources, Fluor and Green Brick Partners. He questioned instead the terminal value of large AI providers, which he said are investing trillions of dollars for uncertain returns. He noted Anthropic is expected to IPO at a whispered $2 trillion valuation. Einhorn wrote that Anthropic claimed a total addressable market above $30 trillion, topping SpaceX's claimed $28.5 trillion, and that the TAM claims appear derived from wages for jobs AI might replace. He argued most of any resulting economic benefit would accrue to AI users rather than providers. He also lamented that the SEC no longer scrutinizes such promotional claims.
Greenlight added several small long positions. ADI Global Distribution (ADIG), a low-voltage electrical products distributor recently spun out of Resideo, was acquired at an average of $21.30 and ended the quarter at $17.92; Greenlight expects a cost reduction plan and commercial growth to double earnings within three years. Century Aluminum (CENX), the largest domestic primary aluminum producer, was bought at an average of $41.77 and closed at $35.98, with Greenlight citing tariffs and government support for a planned Oklahoma smelter. Canal+ (London: CAN), a pay TV company that acquired MultiChoice in 2025, was bought at £2.40 and closed at £2.15, trading at about 6x and 5x EBITA on Greenlight's 2027 and 2028 forecasts.
Greenlight exited GoPro, PayPal, Spectrum Brands and an oil futures position. Its macro book lost 2.0% in the quarter after a bet on Fed rate cuts; Greenlight reduced that position by one-third and retains a position extending into next summer. Average exposure was 103% long and 61% short at quarter-end.
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