SOME people barely need to open their mouths to inspire investors to sell, sell, sell, as proved by US hedgie David Einhorn, who was making waves in the stock market again yesterday as he told a crowd at the Value Investing Congress he was betting against burrito chain Chipotle.
Einhorn – who spent last year’s speech advising his captive audience to short sell coffee-brewer Green Mountain, sending its shares down 11 per cent in an afternoon – told delegates he thinks Chipotle will struggle to compete on cost with fellow Mexican chain Taco Bell. True to form, after Einhorn’s verdict Chipotle’s shares promptly fell by six per cent. “I’m told the stock started falling while I was still clearing my throat,” he said.
Einhorn shot to prominence earlier this year when he was fined £7.2m by the UK’s FSA for trading in Punch Taverns shares after he declined to become an insider – which would have seen him barred from trading in Punch shares – and was later deemed to have been in possession of inside information over a refinancing deal.
Einhorn paid his fine but has always protested his innocence: “Rather than continue an arduous fight, we have decided to put this matter behind us and concentrate on managing our business,” he said at the time.