20 Things You Didn’t Know About David Einhorn
David Einhorn is an American businessman and entrepreneur who is best known for building a fortune in hedge fund management. He has recently been in the news for a variety of things relating to his professional and his personal life. He’s somewhat of a celebrity in the business world these days, and he’s also brilliant in creating moneymaking companies. We wanted to dig a little deeper to learn more about this fascinating financial expert and when we did we learned some interesting facts about him. Here are 20 things that you probably didn’t know about David Einhorn to help you become better acquainted with him.
1. He has a birthday coming up
David Einhorn ws born on November 20, 1968. He is currently 50 years old and in a few weeks, he will turn 51. He was born in New Jersey to his parents Stephen and Nancy Einhorn, but they raised him in Demarest, New Jersey until the age of 7. At this time, the family moved to Wisconsin where he and his brother Daniel and their mother and dad continued to live. David was raised in a Jewish family.
2. He has an Ivy League education
David attended the Nicolet High School in Glendale, Wisconsin and graduated from teh school in 1987. He was accepted at the prestigious Cornell University where he earned his bachelor’s degree in government in 1991, graduating summa cum laude. While at Cornell, he was a member of the Sigma Alpha Epsilon Fraternity.
3. He followed in his father’s footsteps professionally
David’s father Stephen was a businessman who set a good example for his sons. He was the founder of Einhorn & Associates which is a consulting firm, and he also served as president. He also established the Capital Midwest Fund which is a venture capital fund. David’s brother Daniel works with his father but Daniel went out on his own although he patterned his career after his father’s accomplishments.
4. David moved to Westchester, New York
IN 1996, David moved to Westchester and he had a $900,000 investment to start his own hedge fund. Between 1996 and 2016, the fund generated an annualized return for investors of 16.5%. He is the founder of this fund as well as the president of the firm that is called Greenlight Capital. It is a long-short value-oriented hedge fund. Although the fund has declined significantly in the past few years, it had a high in 2014 of $12 billion in value which has declined to $5.5 billion by July of 2018.
5. His net worth is $1.52 billion
Although things haven’t gone smoothly for Greenlight Capital it is far from in trouble. Einhorn has led the company as its president and founder since it was established. His personal net worth was estimated at $1.52 billion even after the decline in 2018. He has made his fortune managing this hedge fund and handling his investors’ contributions. His annual salary is $80 million and he’s still bringing in a tidy sum of compensation each year.
6. He was involved in a controversy in 2007
Allied Capital accused Einhorn of engaging in market manipulation. They obtained his phone records illegally and filed a complaint against him. The entire matter was investigated by the U.S. Securities and Exchange Commission. The SEC made the ruling that Allied had in fact broken the laws.
Einhorn wrote a book that was titled “Fooling Some of the People All of The Time. The book details the fight with allied and the SEC that lasted for a full six years and he received positive reviews in general. There was so much data in the book that it would be interesting for someone in the financial arena who has a good understanding of the terminology and its meaning. He is well versed in industry lingo and he brought some interesting facts about the business that takes place that most people are either not aware of or wouldn’t believe unless they saw it in action. The book was enlightening to say the least.
8. Einhorn’s company received a huge fine
The FSA (the United Kingdom Financial Services Authority) found that Greenlight Capital was guilt of trading on inside information and named Einhorn as the one responsible. This resulted in a hefty fine of $11.2 million to Greenlight Capital and Einhorn. The claim that was made was that Einhorn sold over 11 million shares to avoid a stock price collapse of nearly 30%. Although Einhorn argued that the fine wasn’t lawful and it ws not just, he preferred not to engage in a long fight so he paid the fine to be done with the affair which turned out to be the second-largest fine ever sanctioned in the history of the British FSA. This incident concluded in January of 2012.
9. He almost bought a portion of the Mets
David Einhorn attempted to purchase a minority share in the New York Mets baseball team. The deal was struck in the latter part of May in 2011. He paid $200 million for the minor share with the option to purchase a majority stake in the team after three years if teh majority owner could not meet certain financial responsibilities. The deal, however, didn’t go through as the Mets ended their negotiations.
10. Einhorn got into a fight with Elon Musk
Just recently there was a public display of disagreement between Einhorn and Tesla’s Elon Musk. The two fired shots at one another over Twitter in a series of questions about Tesla’s financial statements. It seems that Einhorn sent a critical investor letter at the end of October and although the content was not shared it sparked a debate between the two with a bit of back and forths, resulting in Musk calling Einhorn “Mr. Unicorn” which is his surname translated from the German language to English. It’s always news when two of the richest men in the world take to social media to bicker with one another and when name-calling ensues it gets everyone’s attention.
11. He is a bold investor
David Einhorn is not faint of heart when it comes to making investments with his clients’ capital but he is very calculating when he does so. He has had his share of victories and losses over the years. He is still one of the most closely watched investors in Wall Street. He makes daring investment calls both short and long.
12. His overall track record is decent
It has recently been determined that Einhorn’s Greenlight Capital hedge fund is valued at about $7 billion in assets. Since the fund was established in May of 1996, it has posted a net return of 15.4% overall. That figure was higher at one point but there have been some serious swings in the market. He’s been successful in riding out the tough times though.
13. Einhorn is blunt and doesn’t mince words
David Einhorn is a professional and expert in his field and he isn’t afraid to call things as he sees them, even if his opinions are not popular with others at the time. Proof of that is found in his published book. When the financial crisis hit, he gained attention when he questioned the books of Lehman Brothers. He made the point that the firm was being evasive about its risks. It made Lehman Brothers look as though they had a lot to hide and he was somewhat of a hero for some.
14. David Einhorn made it to several Forbes’ lists
Einhorn was listed as number 1650 on Forbes’ Billionaires of 2018 list, however, he wasn’t included in their 2019 update. He was listed as #375 on the Forbes 400 for 2015 but didn’t make the 2016 edition. He was also listed as number 18 for the Hedge Fund Managers of 2015 but was dropped from the list in 2016. We’re seeing a pattern here.
15. Einhorn is a self-made man
Forbes has a formula that they use for assessing billionaires in the category of being self-made. The rating goes from one to ten with ten being totally self-made with no help from others in building wealth and fortune. Although we know Einhorn’s father was also a prominent businessman and entrepreneur in the same business, David was given a score of 7, which is remarkably high. He is a self-made billionaire who didn’t depend upon family money. He went out and carved a niche for himself and established his own company. Although there are three points for getting help from others in there, it shows that he did the majority of the work on his own.
16. He’s going bearish on Tesla
Einhorn made the decision to short Tesla and the company is effectively placed in his “bubble basket.” Most of us are aware of the spat that recently took place between Einhorn and Musk, but David made the decision to assume a bearish attitude about the automaker in November of 2017. This has been brewing for two years. The stock for Tesla has fallen almost 31.7% within the past 12 months. Because Einhorn took a short position against Tesla, his firm has reaped the benefits. The recent tiff with Elon Musk was over implications that were similar to the comments he made about the Lehman Brothers some years ago.
17. David Einhorn’s marriage is broken
In June of 2019, it ws reported that David Einhorn’s marriage to Cheryl Strauss has hit the rocks. The two made the decision to separate as they are heading towards divorce. When people who are billionaires end their legal marriage, it’s a lot different because of the stakes, and the complicated finances. These can be difficult to sort out. After more than twenty years of marriage, the two are calling it quits.
18. He has three kids
Einhorn and his estranged wife Cheryl have three children together. The fact that the couple shares a large estate and there are three children involved is going to further complicate the legal processes. It’s always a sad situation when families break up. It is still unknown what caused the breakup as neither party is sharing that information publicly, to their credit. Cheryl is the one who came up with the name “Greenlight” for the business that he founded.
19. The Einhorn’s are philanthropists
Cheryl and David are among with wealthiest people in the United States and they have done a lot of good with their money. They founded the Einhorn Family Charitable Trust in 2002. Their goal ws to make contributions to the peace and harmony of society in their corner of the world and they are both known for their generosity.
20. David and Cheryl are following a trend
The breakup of the Einhorn’s marriage has only to do with the two of them and whatever factors have led to the separation, but there is a trend that has recently been happening among couples who fit the same profile. There are a lot of hedge fund founders who have their marriages ending and there is speculation, no pun intended, that it has something to do with the conditions of the market and the stress that is associated with the nature of the job. Couples who have similarly been married for more than two decades are filing for divorce and although some part ways amicably with an agreed-upon settlement, others wage war in the courtrooms for their slice of the pie, which is often hard to prove and involves a lot of complicated investigation. It’s a trend that has been recently noted, and for better or worse, we wish the Einhorn’s the best solution in the end.