Lululemon Falls on Rumor That Einhorn is Short

Shares of women's athletic apparel retailer Lululemon LULU are falling on heavy volume on Thursday after unconfirmed market rumors that David Einhorn's hedge fund Greenlight Capital is shorting the high-flying stock. At last check, LULU was trading down more than 6% and was sitting near session lows. Volume has been very heavy in the name, which is moving on pure speculation, with around 5.2 million LULU shares trading hands compared to a 3-month daily average of 2.6 million. Streetinsider.com is reporting that Greenlight Capital has declined to comment on the rumors. Einhorn is a value investor who also has a reputation of being an extremely savvy short-seller. He made massive short bets against Lehman Brothers well in advance of that bank's collapse, and more recently, has made a very tidy profit betting against former high-flier Green Mountain Coffee Roasters. What is interesting about the Lululemon rumors is just how much volume they have sparked in the stock, which is a testament to the regard that market participants have for David Einhorn. In 2012, LULU shares are up almost 25%, but the stock has been caught in a downdraft recently. While the Einhorn rumors are certainly effecting the stock on Thursday, a market sell-off and weakness in retail in general is probably adding to the losses. Other athletic retailers such as Nike NKE and Under Armour UA are also under pressure. Nike shares were last trading down 1.60% while Under Armour had lost almost 4%. The entire consumer cyclical sector as a whole, however, is outperforming the S&P 500 with a loss of just 0.30% versus a fall in the S&P of 1%.