Everyone Thinks David Einhorn Just Hinted That He's Short Herbalife, But Here's Why That's Probably Wrong

Everyone thought that closely-watched hedge fund manager David Einhorn, the founder of Greenlight Capital, is short Herbalife because of this cryptic message in his fourth quarter letter to investors.

On May 1, 2012, Einhorn asked some questions during an Herbalife conference call that immediately caused the stock price to tank.

Here's why we don't think the reference to "iron supplements" is about Herbalife, but actually about his iron ore short.

From his Q4 letter:

Back in October at a hedge fund conference in Dallas, Einhorn said that he's shorting iron ore.

Herbalife is the stock that hedge fund titan Bill Ackman, the founder of Pershing Square, is shorting because he thinks it's a "pyramid scheme." Ackman is shorting more than 20 million shares and has a price target of zero.

UPDATE: The Wall Street Journal's Juliet Chung reports that Einhorn shorted Herbalife last year and it was profitable for Greenlight. Einhorn does not currently have a bet on the multi-level marketing firm that sells nutrition products. It's also unclear how big his short was and what the profits were, the report said.