Poker Player's Fund Loses $140 MillionDavid Einhorn Quits Board of Directorsby Thor Henrykson | Published: Mar 08, 2007 |
 
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David Einhorn, who took 18th place at the 2006 World Series of Poker (winning $659,730), finds himself in the middle of a brewing financial crisis. Aside from his forays into the poker world, Einhorn is the founder of Greenlight Capital LLC, a hedge fund that bets on the rise and fall of stock prices.
Though Einhorn's $4.7 billion fund has returned on average 29 percent for the last 10 years, it finds itself in a bit of trouble due to a 6.3 percent stake it holds in New Century Financial (a sub-prime mortgage lender that lends to people with high debt and low credit ratings).
New Century Financial Corp's stock has plummeted 90 percent since Einhorn joined its board of directors in March 2006 (mainly due to a Federal criminal probe of the company). As a result, Einhorn's fund has lost about $140 million, prompting Einhorn to quit the board. Some analysts predict a bankruptcy filing in New Century's future, which just announced it has halted loan applications.
As to Einhorn, he donated all of his 2006 WSOP winnings to charity.
2 Comments
shaneo19
over 2 years ago
Wow, that is sad. I really feel bad for him.
WalkmanAA
over 2 years ago
140 million is like a little over 2% of the entire funds worth so is this really a crisis? I don't know much about this area but it would seem odd that one company going bankrupt (that you own only 6% of) would devastate your fund. Unless he is the one getting probed then he might want to have a Ken Lay style heart attack.