The Einhorn effect: Why it didn’t work with Apple

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FORTUNE — Hedge fund billionaire David Einhorn is best known for, in Bloomberg TV anchor Stephanie Ruhle’s infelicitous phrase, the “activity in his shorts.”

That goes a long way to explaining why the man who famously torpedoed Allied Capital and Lehman Bros. got nowhere last May when he told investors tweeting his every call at the annual Ira Sohn conference that Apple (AAPL) was undervalued at a market cap of $500 billion and could easily reach $1 trillion.

“Unlike the other stocks he had mentioned, shares of Apple barely budged,” writes Bloomberg’s Nick Summers. “King Midas had touched a table, and it stubbornly remained wood.”

It’s the opening anecdote in Summers’ story on the cover of the latest issue of
Bloomberg Businessweek
, which hits newsstands Friday.

It turns out that Einhorn doesn’t care to be thought of a “short” — a vulture, in the popular imagination, who feeds on the misfortunes of badly managed companies. Ironically his campaign to boost his biggest long ($877 million worth of Apple at that point) — first by trying to convince Tim Cook to issue $50 billion in preferred shares, then by suing Apple when he didn’t get his way — may have done his reputation more harm than good.

Summers does a fine job with the story. You can get an advance look at The Einhorn Effect.

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