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 2 Grand Central Tower
 140 East 45
th
 Street, 24
th
 Floor
 New York, NY 10017 Phone: 212-973-1900
 Fax 212-973-9219
 www.greenlightcapital.com
July 13, 2015 Dear Partner: The Greenlight Capital funds (the “Partnerships”) returned (1.5)%,
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 net of fees and expenses, in the second quarter of 2015, bringing the year-to-date net return to (3.3)%. During the second quarter, the S&P 500 index returned 0.3%, bringing the index year-to-date return to 1.2%. On April 15 after the close, Netflix (NFLX) announced its results for the first quarter and conducted a conference call. NFLX shares had already risen 39% in 2015 and were trading at more than 100x 2016 estimates with analysts expecting adjusted earnings for the quarter of $0.63. NFLX achieved just $0.36. Prior to the call, the June quarter consensus stood at $0.86; by the next morning consensus was $0.30. All told, analysts slashed estimates for the next three years. Further, we had just finished watching season three of NFLX’s leading original content show,
 House of Cards
, which appeared to be scripted to compete with Ambien. If you’d told us the news in advance, we’d have guessed it was going to be a bad day for  NFLX holders, but apparently Red Ink is the New Black. The shares opened the next morning 12% higher and never looked back. By the end of the quarter, the shares had almost doubled for the year, making NFLX the best performing stock in the S&P 500 by far. Why did the stock react that way? Cynically: if it soared on bad news, imagine what it would do with good news. Practically: NFLX changed its story and pushed its promises into the distant future, with grand hopes for the decade starting in 2020. It transitioned from being a company judged by how much it earns into a company judged by how much it spends. Whether the spending proves successful won’t be known during the investment horizon of most NFLX shareholders. In today’s market, the best performing stocks are companies with exciting stories where accountability is in the distant future. Most companies are still held accountable to current performance. Micron Technology (MU), which fell from $27.13 to $18.84 during the quarter, was our biggest loser. It’s a cyclical business and, regrettably, we missed the turn of the cycle. Long production lead times make it difficult to match supply with demand, and when demand falls short (as it has recently), shortages can turn into surpluses. Prices (and profits) fell, and MU disappointed. MU also had manufacturing problems that will impact earnings for the next couple of quarters.
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Source: Greenlight Capital. Please refer to information contained in the disclosures at the end of the letter.
 
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With only three remaining players, the industry is behaving more rationally. Manufacturers are redirecting capacity away from computer DRAM to other segments, and we believe that the excess computer DRAM inventory created earlier this year is now being absorbed. Our assessment is that MU shares have fallen too far. Peak quarterly earnings last year were $1.04 and we expect the cyclical trough to be around $0.40 in the August quarter. At $18.84, the company trades at less than 12x annualized trough earnings and less than 5x  prior peak earnings. We expect future cycles will have higher peaks and higher troughs, as the technology story for both DRAM and NAND (including 3D memory) is bright for the next several years. Our long-term outlook is that sometime in the next few years, MU (currently valued at $20  billion with $3.7 billion of trailing net income) will be worth more than NFLX (currently valued at $40 billion with $240 million of trailing net income). It’s a contrarian view, but we don’t think the movie is over. Our other significant loser in the quarter was CONSOL Energy (CNX), which fell from $27.89 to $21.74. While natural gas prices were stable during the quarter, coal prices fell about 10%. Near-term this is not a significant concern, as CNX prices are locked in under long-term contracts for almost all of 2015 and about half of 2016-2018 production. Assuming unhedged forward pricing for coal and natural gas, our long-term resource run-off model values CNX at about $35 per share. This is based on depressed commodity  prices and does not give credit for the company’s implementation of zero-based budgeting, which should further improve its position as the low-cost supplier. From a strategic perspective, the company recently completed an IPO of a master limited  partnership for its coal business. Because investor appetite for coal is exceptionally small at the moment, the offering was met with tepid demand. We were able to purchase shares at a 25% discount to the proposed range. The new entity, CNX Coal Resources (CNXC), has an initial dividend yield of over 13.5% and a free cash flow yield of over 17%. At that value, distress is priced in, though it is far from evident that distress actually exists. On the sunnier side, SunEdison (SUNE) was our only significant winner, as the shares advanced from $24.00 to $29.91. SUNE recently filed for TerraForm Global (GLBL) to go  public. GLBL is a renewable energy yieldco located in emerging markets including Brazil, China, India and South Africa. GLBL will provide a new stream of cash flow to SUNE in the form of dividends and incentive distributions, similar to the structure of the existing yieldco TerraForm Power (TERP). Further, earlier this year SUNE acquired First Wind, the largest wind power development company in the United States. GLBL and First Wind add $10-$11 to our sum of the parts valuation. Greece has been anything but sun-kissed. We continue to hold a small position in Greek  bank stocks and warrants. The best we can say is that from the outset we recognized this to  be a high-risk, high-reward proposition and sized the position accordingly. Neither our losses nor remaining downside exposure are significant.
 
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Last year, it appeared that Greece had finally turned the corner after years of suffering through imposed austerity and the resultant 25% collapse in GDP. Much like the Seahawks’ ill-fated decision to pass the ball at the end of Superbowl XLIX, instead of giving it to monster running back Marshawn Lynch, Greece snatched defeat from the jaws of victory by electing the populist anti-austerity, pro-debt-writedown, Syriza coalition. Puerto Rico’s governor recently said of its own debt, “This is not about politics; it’s about math.” The math for Greece is easy: austerity hasn’t improved the economy and its debts are unsustainable. Knowing this, Syriza no longer wanted to play the “extend and pretend” game. Further, Greece’s recently resigned finance minister Yanis Varoufakis  believed they wouldn’t have to. Mr. Varoufakis, who kept reminding everyone that he is a  professor of game theory, believed that the European leaders would prefer to make concessions now rather than manage the disruption of a Greek default. He must not be familiar with the Tyler Durden school of negotiation:
the first rule of using game theory is  you do not talk about using game theory
. What’s more obvious is that Syriza didn’t understand what the game is. This is not about math; it’s about politics. Consider that the main difference between Greece and France is that France is a big fan of extend and pretend. And as long as France says it will pay, its bonds might yield just a bit more than Germany’s. Though Greece has a superficially unmanageable ratio of debt to GDP, the debt had been restructured so that there is little debt service burden for the next several years. Politically, European leaders  prefer to leave the future problems in the future. Syriza’s refusal to play along is a problem not just for bondholders but also for those holding seats of power. The European leaders fear that if Syriza can claim even a moral victory, it will inspire other European countries to oust their current leaders in favor of populist governments who campaign on the promise of debt repudiation. Though Mario Draghi promised he would do whatever it takes to save the euro, that doesn’t include lifting a finger to assist Greece financially or in any way signal that the ECB has Greece’s back. Just days prior to the January elections, Mr. Draghi announced that the ECB would exclude Greece from quantitative easing for at least six months. Doing whatever it takes is proving to be a conditional promise, as denying Greece access to the capital markets is a key tenet of the European strategy to pressure Syriza. For anyone still missing the joke, Bank of Japan Governor Haruhiko Kuroda summarized the view of the global central planners when he said, “I trust that many of you are familiar with the story of Peter Pan, in which it says, ‘the moment you doubt whether you can fly, you cease forever to be able to do it.’ Yes, what we need is a positive attitude and conviction.” Perception supplants reality. The moment leaders (or markets) start making it about the math, gravity comes into play. The result is that Europe is unwilling to allow Syriza a face-saving compromise, even if that means Greece collapses and the rest of Europe suffers. At this writing, Syriza has capitulated by proposing a deal which leaves Greece with even more austerity than when negotiations began and no actual debt forgiveness. This might not be enough, as the grand

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