In 1996, David Einhorn founded Greenlight with less than $1 million in capital — a good chunk of which came from his parents — at the precocious age of 27.
He proceeded to, in short, crush it, returning an average of 26% per year over the next decade. Greenlight's assets were soon counted by the billion, not the thousand, and Einhorn's reputation as a no-holds-barred short-seller and truth-sayer was taking shape.
Bets against Lehman Brothers and Allied Financial were brutal campaigns, with graying executives and dismissive sell-side analysts alike sneering at the baby-faced investor. He was called "inexperienced" with "flimsy" research and "overdone" concerns. He was also right.
Greenlight more recently has been uneven, as assets have fallen to a couple billion after a peak of $12 billion in 2014. There have been highs — such as a record 37% return in 2022 when many funds lost money — and lows, like his long-running feud with Tesla founder Elon Musk, whom Einhorn bet against and lost.
He's become more reserved, pitching a "boring" chemicals company instead of a bombastic short at this year's Sohn conference. And now the 55-year-old is dealing with something he once was: a thorn in the side.
Former Greenlight analyst James Fishback, who is not much older than Einhorn was when he launched his firm, has been publicly challenging his old boss since leaving last year.
As he started his own fund, potential investors called Greenlight to confirm Fishback's former title, which he said was head of macro. The firm didn't. Fishback sued his old firm for defamation in October, which is now in arbitration, according to a person familiar with the case.
Greenlight has since filed its own lawsuit in March against Fishback for failing to pay back a loan. According to the complaint filed in New York, Greenlight offered him a forbearance on some promissory notes, but Fishback breached the agreement when he "falsely represented himself as having held certain titles during his employment with Greenlight other than 'research analyst.'"
The legal battle notwithstanding — though it's spawned plenty of social media chatter in part thanks to the self-seriousness of Fishback's emails and also caught the eye of "Pharma Bro" Martin Shkreli, who claimed to have made several calls "investigating" Fishback's claims — Fishback is also rattling the cage publicly about one of Einhorn's biggest misses, his Tesla short.
Thursday, Fishback said he was invited to debate Tesla with his old boss, saying Einhorn didn't understand Musk's company's "core value driver" of autonomy. Fishback had previously posted about how the Tesla shorts are wrong and that the company's self-driving technology will revolutionize the world like OpenAI's rollout of ChatGPT did.
Einhorn declined to take up his former employee, writing back that "in order for such a debate to be meaningful, the person on the other side needs to have some knowledge about the subject" — plus, the litigation fight prevents such a thing. His firm declined to comment.
Fishback — who had a viral moment in 2023 when he wrote a piece on high school debate club culture for Bari Weiss's conservative outlet, The Free Press — responded with a chicken emoji and a link to his lawsuit.
"If I'm not qualified, why on earth did you hire me?" he asked.
Einhorn might be asking himself the same thing.
