Introduction

David Einhorn, founder of Greenlight Capital, has recently purchased shares in several regional bank stocks in a bet that these financial institutions will survive the industry crisis that felled Silicon Valley and First Republic banks.

Einhorn’s Purchases

Einhorn picked up almost 2.3 million shares of New York Community Bancorp and bought 22,550 shares of First Citizens Bancshares, both of which purchased parts of failed banks in deals orchestrated by the Federal Deposit Insurance Corporation.

Einhorn’s Position Compared to Others

Michael Burry, known for his bet against the housing market in the 2000s, also bought regional bank stocks. Despite Einhorn’s buys being tied to banks that purchased parts of failed banks, regional bank stocks as a whole have lost over 36% this year.

Performance of Einhorn’s Holdings

New York Community shares are up almost 20% year to date and First Citizens stock has surged almost 67% on the year. Green Brick Partners was Einhorn’s biggest holding, Consol Energy claimed the number two spot after Einhorn increased his exposure by about 50%, both with mixed returns.

Einhorn’s Fund

Einhorn’s hedge fund was up nearly 37% last year as the stock market slumped, dodging the worst downturn since the Global Financial Crisis of 2008-2009.

Disclosure

Money managers with more than $100 million in assets under management are required to disclose long positions to the Securities and Exchange Commission 45 days after the end of a quarter. Because of this window, it’s possible that Einhorn has already made changes to his holdings in the second quarter.

Conclusion

Einhorn’s purchases in regional bank stocks show his confidence in the industry’s ability to survive and thrive in the current economic climate. However, it remains to be seen how these purchases will fare in the future.