Market Overview

Lululemon Falls on Rumor That Einhorn is Short

Shares of women's athletic apparel retailer Lululemon (NASDAQ: LULU) are falling on heavy volume on Thursday after unconfirmed market rumors that David Einhorn's hedge fund Greenlight Capital is shorting the high-flying stock. At last check, LULU was trading down more than 6% and was sitting near session lows. Volume has been very heavy in the name, which is moving on pure speculation, with around 5.2 million LULU shares trading hands compared to a 3-month daily average of 2.6 million. Streetinsider.com is reporting that Greenlight Capital has declined to comment on the rumors. Einhorn is a value investor who also has a reputation of being an extremely savvy short-seller. He made massive short bets against Lehman Brothers well in advance of that bank's collapse, and more recently, has made a very tidy profit betting against former high-flier Green Mountain Coffee Roasters.

What is interesting about the Lululemon rumors is just how much volume they have sparked in the stock, which is a testament to the regard that market participants have for David Einhorn. In 2012, LULU shares are up almost 25%, but the stock has been caught in a downdraft recently. While the Einhorn rumors are certainly effecting the stock on Thursday, a market sell-off and weakness in retail in general is probably adding to the losses. Other athletic retailers such as Nike (NYSE: NKE) and Under Armour (NYSE: UA) are also under pressure. Nike shares were last trading down 1.60% while Under Armour had lost almost 4%. The entire consumer cyclical sector as a whole, however, is outperforming the S&P 500 with a loss of just 0.30% versus a fall in the S&P of 1%.

Posted-In: Hedge Funds Intraday Update Movers General

 

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