Money manager David Einhorn slammed the shale drilling industry that ushered in a new era of U.S. oil production as wasteful, expensive and a terrible investment.
Shale explorers including Pioneer Natural Resources Co. and EOG Resources Inc. plunged as investors heeded Einhorn’s remarks at the Sohn Investment Conference in New York on Monday.
Einhorn, who manages $12 billion as president of Greenlight Capital, said investors who are bullish on oil prices should avoid buying stock in producers and instead invest in the commodity itself. He singled out Irving, Texas-based Pioneer for special attention.
“Pioneer burns cash and isn’t growing,” said the 46-year-old Einhorn. “Why is the market paying $27 billion for this company?”
Pioneer fell as much as 5.3 percent for the biggest intraday decline since Feb. 11. EOG had been up as much as 2.5 percent before Einhorn’s comments triggered a sell-off that wiped out most of Monday’s gains. Both companies recovered some of those declines later: Pioneer closed 1.9 percent lower at $168.33, and EOG was up 0.5 percent.
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