With news finally breaking about the impending minority sale of the Mets as well as the identity of the franchise's newest owner, you may be asking yourself, just who is this David Einhorn guy? And what makes him different from any other stuffy owner? Well not to worry, I've got you covered.
For some personal background, Einhorn is a 43-year old resident of Westchester County, though he originally hailed from New Jersey with some of his formative years also spent in Milwaukee. His earliest loyalties lie with the Mets, however he has admitted that he leans towards the Brew-Crew these days. As most of you already know, he amassed his fortune as a hedge fund manager for the extremely successful Greenlight Capital, which he co-founded back in 1996. Starting with just under $900k -- invested mostly by his parents -- the firm now has over $7 billion with a B in assets under management.
However, Einhorn isn't just another wealthy suit; well he is but he's got a much more interesting backstory than just 'smart guy, invested wisely, bought baseball team'. In the world of finance, he has become something of a giant, a rock star, someone who 'attracts the swarm' as they say. He emerged as one of the most prominent names in the aftermath of the Economic Crisis, thanks in large part to his outspoken position on the accounting chicanery and the eventual collapse of the financial giant Lehman Brothers.
You see, Einhorn has made his bones -- to put it rather bluntly -- as something of a vulture. In economic terms, he is a deft practitioner of the Short Sale -- basically a bet on a stock to fail. When said stock does fail, he rakes in the quiche. And while on the surface this may seem a tad ignominious, in truth there is a lot about this practice and his controversial reputation that we as Mets fans should be excited about:
1) First off, take the short sales. However negative the public opinion surrounding them, for the most part they're necessary. In a way, they're natural. None of us wants to see the sick zebra go down when we're watching Planet Earth but in finance like in nature, when it's time to go, it's time to go. Vultures are as necessary in this world as cats that play the piano. In any sense it is a service that must be performed regularly to maintain the overall health of the system, any system.
And this doesn't mean picking on poor old Mom and Pop just trying to make an honest buck. During the financial crisis this meant firms like Lehman Brothers, who Einhorn publicly railed against as they made a mockery of the term fiscal responsibility. Meanwhile, mainstream Wall Street looked on his warnings as heresy and kept right on walking; we all saw how that ended. Einhorn's history of short sales represents nothing more than a keen eye for detecting market inefficiencies. Sound familiar?
2) Beyond that, I can't imagine a franchise in sports right now that stands to benefit more from such nimble, financial aptitude as the Mets. Einhorn has made a fortune becoming fluent in the language of the balance sheet. Even some of the most well-respected analysts on Wall Street did not perceive the financial irregularities that Einhorn and his team keyed on as they went short on just about every doomed firm from Bear Stearns to Lehman Brothers to Citi (yeesh).
He has shown an astounding ability to analyze finances and even more importantly a penchant for swimming against the current. And as Matthew alluded to yesterday, despite the fact that he's officially a 'non-operating partner', there's little doubt that the club could, should and probably will take advantage of his financial expertise at some point during this partnership, whether Old Freddie wants to or not.
3) Finally, and most importantly for Mets fans, as the suddenly undoubted heir to Fred's throne, Einhorn represents something exceedingly important around these parts, a breath of fresh air. Perhaps this is best illustrated in the statements that Einhorn himself made earlier this week when he spoke about a seemingly inept, 'Charlie Brown management' team. Einhorn was in fact referring to top officials at Microsoft but as he described a top-down mindset that was 'stuck in the past', Mets fans need only close their eyes and imagine that he could have easily been speaking about his newest investment partner:
'He’s allowed competitors to beat [them]. Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes.'
As with Microsoft, that is not to say that Fred Wilpon's time with this club has been all bad. He's not the ogre that he's been made out to be this week. He truly has done some great things in his time here. But like finance, nor is baseball exempt from the fundamental laws of nature and at some point, it's going to be time to go. Even the most successful organizations need a shake-up to keep from growing stale in their best practices and their ideas. As David Einhorn may as well have told Fred Wilpon, 'We see what you can do...it's time to give someone else a chance.'
