Einhorn, founder and president of Greenlight Capital, kicked off the speech by arguing that a handful of leading American oil companies that rely heavily on fracking were “poised for a fall”—even if the price of crude rebounds from its current depressed prices.
“We object to oil fracking because the investment can contaminate portfolio returns,” Einhorn said during his presentation.
Of those short positions, Einhorn described Pioneer Natural Resources PXD as the “mother fracker,” saying its oil production and reserves have not kept up with the company’s increased spending on drilling and developing wells.
“It’s well loved, well located and well run,” Einhorn said as he introduced the company. Still, he added, “A business that burns cash and doesn’t grow isn’t worth anything,” he said. “That’s like using $50 bills to counterfeit $20s.”
Shares of Pioneer Natural Resources dropped immediately as Einhorn detailed his position; more than 3% during.
So rethink your position. Just a thought.
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