Einhorn Backs GM and MRVL

Look for a rebound in shares of General Motors and Marvell Technologies. Hedge-fund manager David Einhorn says both are poised for a boost after declining since March 31st. There is “further embedded value in some of the longs that have underperformed in the quarter, including General Motors and Marvell Technology,” according to Einhorn. He also says both companies trade at low valuations relative to earnings and have “strong cash positions.” Einhorn is the Chairman of Greenlight Capital Re Ltd, the Cayman Islands-based reinsurer. He uses the company to generate funds for bets on gains and declines in securities. General Motors shares rose more than 1 and a half (as of 1:15pm ET). GM, the world's largest automaker had fallen 23 percent in the second quarter. Meanwhile, Marvell Technologies, the Bermuda-based developer of circuits for communications markets rose fractionally. It had dropped 28 percent in the three months prior to July. GM's share price is 5.4 times earnings over the past year. The Detroit-based company also had more than $30 billion in cash and marketable securities as of March 31st. Marvell's price-to-earnings ratio is 12. Meanwhile, Greenlight Capital's net loss widened in the second quarter to $36.1 million from $16 million a year ago. That's as investment results worsened amid a decline in equity markets. “While our shorts went down more than the market, our longs also went down more than the market and gave back some of the first-quarter gains,” Einhorn said. Einhorn and his hedge fund Greenlight Capital are known for shorting Lehman Brothers before it collapsed in September 2008. Einhorn is also known attempting to buy a minority stake in the New York Mets baseball team in 2011. However, the team ended their negotiations with Einhorn after it failed to reach an agreement if the team's majority owner Fred Wilpon could not meet certain financial obligations.