Einhorn said the short bet against J.C. Penney was the $8 billion firm's "most profitable short of 2012." When a hedge fund manager is short a stock he believes the value of the shares will fall. If he is long, he believes the stock will rise in value.
"Though the retailer was poorly positioned, the shares rocketed in early 2012 based on overhyped promises put forth by a highly promotional CEO," Einhorn said in the quarterly note, dated July 26. "We doubted the new strategy would succeed. We covered when the board fired the CEO before he could turn the company into a penny stock."
Greenlight also closed a long position in Microsoft.