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David Einhorn May Have Lost At GM, But He Won In Our Hearts

It's not easy being a visionary.
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It is the eternal challenge of the visionary to challenge old ways of thinking without diverging so far from orthodoxy so as to seem downright heretical. Socrates lost his life for questioning Athenian pieties. Galileo lost his freedom for saying the earth goes around the sun. And on Tuesday, Greenlight Capital founder David Einhorn lost his dignity for humbly suggesting that General Motors shareholders split the stock into two classes:


Preliminary results showed more than 91 percent of shareholders voted against Greenlight's proposal to have GM offer dividend and capital appreciation shares, according to GM officials at the automaker's annual shareholders' meeting.

Einhorn's proposal wasn't your typical give-us-cash-and-board-seats activist play. It was a divinely inspired effort. As the Greenlight theory went, the market undervalues GM's hefty and reliable dividends, yoked as they are to a stock that is a poster child for unimaginative legacy brands anchored to the past in the face of seductive upstarts. To unlock this value – specifically $38 billion of it – GM could set aside one group of shares that pay dividends from another, riskier set that would benefit from future capital appreciation (i.e., buybacks).

Needless to say, GM didn't love Einhorn's maneuver. Neither did shareholder advisers. Neither did ratings agencies. And as we learned Tuesday, neither did shareholders themselves (nor did they reward him with any board seats).

But maybe David Einhorn's mission wasn't just to get us to take a whole new look at GM. Maybe he wanted us to take a whole new look at ourselves. Maybe each of us has some store of unlocked value hidden in the deepest confines our our soul. Perhaps we'd all grow that much more if we could only separate our public selves – stable and industrious, yet also predictable and uninspired – from the vital and creative core that lends us our essential humanity.

Then again, maybe it's Einhorn who's stuck in the past. It could be that it's time for him to let go of old prejudices like math and do what we suspect his heart truly desires: Buy Tesla.

GM investors reject Greenlight share plan, board slate [Reuters]



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