David Einhorn Says Tech Stocks Are in an ‘Enormous’ Bubble

David Einhorn Says Tech Stocks Are in an ‘Enormous’ Bubble(Bloomberg) — Technology stocks are in an “enormous” bubble, Greenlight Capital’s David Einhorn said in a letter to investors.“Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped,” he wrote in the Oct. 27 note, seen by Bloomberg.Tech stocks have driven the market’s gain this year. The Nasdaq 100 Index is up 33% since Jan. 1, led by gains in Zoom Video Communications Inc. and Tesla Inc. By contrast, the S&P 500 has risen 5.3%.Einhorn points to “an IPO mania,” huge market concentration in a small group of stocks or a single sector, extraordinary valuations and “incredible” trading volumes in speculative instruments as signs of a bubble.As a result, Greenlight has adjusted its short book including adding a fresh bubble basket of mostly “second-tier companies and recent IPOs trading at remarkable valuations,” he wrote.A spokesman for the firm declined to comment.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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