Is Lululemon Athletica (LULU) About to Get 'Einhorned'

September 18, 2012 1:13 PM EDT
Another day, another David Einhorn rumor.

Today, market chatter suggests that the hedge fund honcho has taken a short bet on Lululemon Athletica Inc. (NASDAQ: LULU). Similar chatter recently suggested he was shorting Apollo Group Inc. (Nasdaq: APOL), while covering his Green Mountain Coffee (Nasdaq: GMCR) short.

Today's chatter could have been sparked by an interesting WSJ article discussing 'The Einhorn Effect.' "We call it being 'Einhorned,"' says Scott Warner, a portfolio manager at Pacific Alternative Asset Management.

The Wall Street Journal reviewed the performance of 22 stocks after they were mentioned by Mr. Einhorn in television interviews, investor conferences, other public events and letters to Greenlight investors. The nine companies where analysts and investors saw his comments as negative fell by a median of 4.9% on the same day, the analysis shows. Thirty days later, the median decline was 13%.

So is Einhorn short Lululemon Athletica? The truth is... nobody knows, except Einhorn and his traders of course. However, Wall Street may soon find out what Einhorn has been up to on the short side. Einhorn is scheduled to speak at the 8th annual Value Investing Congress on Tuesday, October 2.

Shares of LULU are down 3.6 percent mid-day to $74.63.


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