(Adds GM statement, paragraph 2, adds GM closing stock price)
By Svea Herbst-Bayliss and Nick Carey
BOSTON/DETROIT, April 25 Greenlight Capital,
which has been pressuring General Motors Co to
restructure its share class, said on Tuesday it believed the
automaker's shareholders will vote in their best financial
interests and support the hedge fund's two-class stock proposal
and nominees for the board.
A representative for GM said Greenlight's proposal to create
two classes of stock represents an "unacceptable risk and is not
in the best interests of shareholders."
In a broad-ranging letter to investors about the first
quarter of 2017, seen by Reuters, Greenlight also said it had
added three new long positions and exited several short
positions. Greenlight is run by billionaire investor David
Greenlight added bets on Conduent Inc, Perrigo Co
Plc and an unnamed European financial institution. The
hedge fund said it lost money on bets against three Canadian
Greenlight has contended for some time that GM shares are
undervalued and says it has a plan to boost the automaker's
A spokesman for Greenlight, Jonathan Gasthalter, declined to
Einhorn proposed in late March that the U.S. automaker
create one class of stock that pays a dividend and one that does
not, but would be tied to GM's potential growth.
No other GM shareholder has backed Einhorn's proposal, with
Warren Buffett's Berkshire Hathaway Inc remaining
Moody's Investors Service and S&P Global Ratings said such a
structure could hurt the automaker's credit rating.
Einhorn has since floated three nominees for GM's board and
accused the automaker of misrepresenting his plan to rating
agencies, a claim GM has rejected.
"We believe others recognize that the stock is deeply
undervalued and when shareholders grasp the math and the extent
of GM's behavior, they will vote with their wallets and for
needed change at the Board level," the letter dated April 25
GM shares closed 0.2 percent higher at $33.99 on Tuesday.
Greenlight also said that Tesla Inc, the electric
carmaker that earlier this month briefly passed GM as the most
valuable U.S. automaker, was overvalued.
Greenlight said in the letter that sooner or later what it
called the Tesla bubble was bound to burst.
"There was no catalyst that we know of that burst the dot-com
bubble in March 2000, and we don't have a particular catalyst in
mind here," the letter said. "That said, the top will be the top
and it's hard to predict when it will happen."
(Editing by Matthew Lewis)