Updated from 9:01 a.m. ET with opening share prices and additional information throughout.
NEW YORK (TheStreet) - David Einhorn of Greenlight Capital won't be wasting away in burritoville any longer.
Einhorn has closed his short trade in Chipotle Mexican Grill (CMG) after a bet against the popular Mexican restaurant chain gave the hedge funder "gas." Greenlight appears to have lost significantly on its Chipotle short, after exiting the trade in the first quarter.
Greenlight Capital said in its first-quarter letter to investors it closed a short position in Chipotle shares at an average price of $417.56. Because Greenlight had bought shares at an average price of $320.29, the fund calculates its internal rate of return (IRR) was a loss of 33%.
"This short gave us gas," Einhorn said in the letter. Chipotle shares opened Wednesday trading at $508 a share.
The closing of the trade comes about 18-months after Einhorn first disclosed a bearish view of Chipotle at the Value Investing Congress in October 2012. At the time, Einhorn said that Chipotle might suffer from increasing competition, slowing comparable store growth and cost pressures.
At the October 2012 investor conference, Einhorn famously cited Taco Ball's Cantina menu as a particular risk for Chipotle leading many in the business media to conduct taste tests. Generally, the consensus was that Einhorn's numbers were compelling, however, his gastronome may have been misguided.
After a few disappointing quarters that gave credence to Einhorn's views, Chipotle was able to revive growth and use a heavy slate of store openings to grow the company's sales and earnings. Within a year of Einhorn's short, Chipotle shares had recovered, rising above $400 a share.