Martin Marietta Fights Back at Einhorn

David Einhorn of Greenlight Capital is not a popular man within the offices of Martin Marietta Materials MLM, after he slammed the company at the annual Ira Sohn Investment Conference, causing it to instantly tank 10%. It is currently trading down 8%. "Recent earnings benefited from one time fiscal stimulus that is about to wind down," Einhorn said at the conference, obviously deciding that MLM is his new favorite company to short. The rumor earlier in the day had been that Einhorn was going to short Herbalife HLF, but that company's stock is surging 9% on Thursday. The scary thing for MLM is that Einhorn is rarely wrong. He famously shorted Lehman Brothers just prior to that bank's demise, and more recently he shorted Green Mountain Coffee Roasters GMCR. However, Martin Marietta responded to the comments directly to Benzinga, telling us that, "Unlike companies targeted by shorts, Martin Marietta has come through a challenging period for the industry by carefully managing capital and making disciplined operational decisions." "We are profitable and have a solid balance sheet, which will allow us to capitalize on positive industry trends and positions us well for the future." If there is a bright side for MLM following Einhorn's unfavorable comments, it is that the potential $6.7 billion hostile takeover of Vulcan Materials VMC which seemed all but dead earlier in May, may now be back on. The takeover was on the ropes after a Delaware court ruling and VMC;s insistence in staying independent, but Einhorn's intervention has resulted in traders betting that the deal will eventually go through. Einhorn's comments, bad enough for MLM, will also reflect badly on VMC, the other company at the top of the pile for producing construction aggregates or crushed gravel and stone that's used to build roads and other infrastructure. Most analysts seem to agree that, while Einhorn has not really done Martin Marietta any favors, he has hardly caused disastrous results either and the only thing that has really changed is what the company will have to offer to eventually acquire Vulcan Materials. The end of Wednesday's trading saw a close-to-identical share drop for Martin Marietta and Vulcan Matrials, plus an end-of-day merger spread of under $1. Still, the fact that remains that before MLM look to move forward with any deal, it will need to address all concerns that have been raised. Follow me @BCallwood.