David Einhorn Folds 'Em: Dell, Best Buy Gone

NEW YORK (TheStreet) --"You gotta know when to hold 'em. Know when to fold 'em." -- Kenny Rogers.

Hedge fund manager and part-time poker player David Einhorn has followed that advice, cutting his positions in Best Buy (BBY) and Dell (DELL), he told investors in a letter today.

The Greenlight Capital manager, known for his short positions in Lehman Brothers and Green Mountain Coffee Roasters (GMCR), noted that the investments in the two companies underperformed, and it was time to move on.

"Dell (DELL) proved to be a disappointment. We had thought that the growth in the non-PC business would be enough to offset the deterioration in the PC business. The non-PC growth was smaller than we'd hoped and the PC deterioration was worse than we'd anticipated," Einhorn wrote to investors. He did go on to note that Dell has a "good balance sheet," but management appears to be using the cash to buy better businesses. He exited the position with a loss.

Dell recently announced it was buying Quest Software (QSFT) for $2.36 billion.

Einhorn also sold out of his position in Best Buy at a loss, calling it "particularly irksome."

The hedge fund manager believed that Best Buy could compete with Amazon (AMZN) when it came to the buying decisions of consumers, noting that Greenlight's store surveys showed no price benefit to browse at Best Buy, then buy on Amazon.

He did note that were was deterioration in the company's U.S.-based performance, but attributed that to "a lack of a 'must have' consumer electronics product, rather than an erosion of [Best Buy's] competitive position."

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--Written by Chris Ciaccia in New York

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