Greenlight Capital makes big investment in Boston Scientific

February 18, 2010 by MassDevice staff

Outspoken hedge fund manager David Einhorn buys a $300 million piece of Natick, Mass.-based device maker Boston Scientific Corp.

David Einhorn, who publicly shorted Lehman Brothers stock in the summer of 2008, fought a very public battle against Allied Capital and won big at the 2006 World Series of Poker, is putting some of his chips on Boston Scientific Corp. (NYSE:BSX).

Einhorn, the president of New York-based Greenlight Capital, recently disclosed a more than $300 million stake in the Natick, Mass.-based medical device company, according to filings with the federal Securities and Exchange Commission.

Einhorn bought some 32 million shares in October at an average price of $8.42 per share, according to a letter sent out to shareholders of Greenlight in mid-January.

"We believe that BSX's well incentivized and seemingly very capable new CEO will execute a significant turnaround," Einhorn wrote.

The position in BSX makes Greenlight among the largest shareholders in the company, joining other investor heavyweights such as Dodge & Cox, PrimeCap Management and BlackRock Inc.

Einhorn is one of the more colorful and successful investors on Wall Street. His funds have produced 22 percent annualized returns since their inception in 1996, according to Greenlight.

A 2008 New York Magazine profile of Einhorn describes him as "something of a legend on Wall Street, not only for his investing prowess, but also because of an unusual achievement: An accomplished bridge player who has played against (former CEO) Jimmy Cayne of Bear Stearns fame, he took up poker on a lark — and won $660,000 at the 2006 World Series of Poker. But Einhorn is entirely lacking in Vegas bravado. He’s mild-mannered to a fault. Which give his utterances all the more power."

His card skills aside, Einhorn is perhaps most famous for publicly announcing his firm was shorting Lehman Brothers in May 2008, during a speech at the Ira W. Sohn Investment Research Conference. He attacked the now-defunct investment bank for its recklessness and putting the financial system at risk, closing the speech by saying that regulators should “guide Lehman toward a recapitalization and recognition of its losses — hopefully before federal taxpayer assistance is required,” according to the magazine.