Investor Einhorn said he bought Peloton again on this latest dip. Here’s what else he’s buying
Hedge fund manager David Einhorn said he bought Peloton Interactive after its latest dip, along with some other bets. The Greenlight Capital founder said investors have overreacted to Peloton’s latest earnings results, after the connected fitness company’s worse-than-expected holiday quarter caused the connected fitness stock to plunge 26% on Thursday. The poor results added to Peloton’s woes. At the height of the pandemic, the stock was priced at above $170 per share, but it has since cratered after a reopening of the economy drove people back to in-person workouts. Peloton was last at not even $5 a share. But Einhorn said the stock was unfairly punished given the return of an old CEO, as well as an improving balance sheet. “I don’t think Peloton is in secular decline,” Einhorn told CNBC’s Sara Eisen on “Money Movers” Wednesday. “I think new management has come in. They’re cutting costs. There’s quite a lot of cash flow. They’ll refinance their debt in a few months. I think it should be okay.” Einhorn’s other bets include Acadia Healthcare , which he said looks more attractive now that the provider of behavioral healthcare services has replaced its CEO with a former one who was more successful with the company. Debbie Osteen was a former CEO who presided over Acadia during a significant period of growth for the company between December 2018 to March 2022. That could help revive a stock that has cratered to $13 from $80 just a few years ago. On Wednesday, shares of Acadia rallied 12% following Einhorn’s comments. “If $80 was the wrong price, $13 is also the wrong price, and maybe over the next couple of years it wouldn’t surprise me at all if it made it halfway back,” Einhorn said. ACHC 1D mountain Acadia Healthcare, 1-day Deckers Outdoor is another bet the investor favors. While the stock is roughly 28% off its recent high, the company’s portfolio of brands including Ugg remains compelling and continues to resonate with the consumer, he said. On the other hand, Einhorn said he’s negative on housing, saying the sector is in a “structural decline” given a shortage of homes, higher rates, and affordability issues that make housing very challenged. He also said he has some high conviction shorts he does not plan on revealing, though he added that the size of shorts have become smaller since the rise of the retail investor.
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