David Einhorn on his proposal to boost General Motors, how to trade Trump’s agenda


Greenlight Capital's David Einhorn shared his market views in an exclusive interview on CNBC's "Halftime Report" Tuesday.

Earlier in the day, the hedge fund manager proposed a dual share class structure for General Motors aimed at increasing shareholder value.

On his General Motors plan: "Some investors just want … the dividend. They don't care about the other 75 percent of the earnings. And there's other investors that care about the earnings, but don't care about the dividend," he said. "Our idea is essentially to pay the same money to the same people. Just do it in two different CUSIPs. That way everybody can have what they want. … If you actually implemented this plan, which we expect that they will, you're going to unlock a tremendous amount of value."

On trading President Donald Trump's agenda: "You're going to have a lot of jobs. You're going to have higher wages because you're going to have maybe a labor shortage. Plus you're going to have higher interest income because the Fed is raising interest rates. All of this is very positive for personal income," Einhorn said. "If you have high levels of personal income, I think you're going to wind up with high levels of demand for new cars. … Investors are very focused on things like infrastructure stocks, when really I think that if you believe the Trump story, you should be investing in consumer durables like autos."

Einhorn's hedge fund Greenlight Capital was up 4.5 percent in the fourth quarter last year, bringing its performance for 2016 to 8.4 percent compared to the S&P 500's 12 percent return, according to an investor letter. From inception in May 1996 to the end of 2016, the fund generated annual net returns of 16.1 percent.

He also discusses:

  • General Motors' stock performance
  • Credit rating
  • Where we are in the auto cycle

To watch the broadcast interview in its entirety, you must be a CNBC PRO subscriber.

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