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Investor pumps money into Micron

by on26 November 2013



Does David Einhorn know something we don’t?

Investor David Einhorn is using his hedge fund Greenlight Capital to buy a stake of about 23.02 million shares in US memory chipmaker Micron Technology. 

This means his outfit owns two percent of Micron. Einhorn has gone on record saying that Micron stands to benefit from industry consolidation. This comment resulted in a rally in Micron's shares.

However, Micron has some serious challenges. At the end of July, Micron, based in Boise, Idaho, completed its acquisition of failed Japanese memory chipmaker Elpida in a move to create economies of scale and better challenge memory chip leader Samsung Electronics.

Elpida though has so much debt, owning it could be a poisoned chalice to any self-respecting company. Memory chip prices slumped last year that led some chipmakers to throttle back production.

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