This Is Exactly How Bullish David Einhorn Is on Apple

Investors already know that institutional selling has contributed greatly to Apple's (AAPL 0.17%) fall. Hedge fund disclosures showed that at large shareholders sold at least 3.4 million shares during the fourth quarter.

Well, it's that time of quarter again, and disclosures from money managers for the first quarter are starting to roll in. Shares were down 17% in the first quarter, with most of that drop coming immediately after fourth-quarter earnings were released in January.

The hedge fund iExodus continues, according to Reuters.

Source: Reuters and SEC filings.

The 370,000 shares that Appaloosa sold were only recently acquired, since it had purchased 391,000 in the fourth quarter. At the time, that boosted its position by 75%, so it's just paring the position back from whence it came. This isn't nearly a comprehensive list, but these funds are some of the more notable managers selling Apple.

It isn't all bad news though, as vocal Apple bull David Einhorn significantly boosted his stake in the iPhone maker. The Greenlight Capital manager launched a campaign to get Apple to give more back, and is mostly pleased with its new $100 billion capital return program, even if it differs from his "iPref" proposal.

Earlier this month, Einhorn did mention that he had increased his holdings in Apple without specifying by how much. Investors now know exactly how bullish he is, thanks to Greenlight's latest 13F. The hedge fund legend just added 1.1 million shares to his Apple position. That nearly doubles the 1.3 million shares that Greenlight had in December, and the fund is now the proud owner of 2.4 million shares.

Noticeably absent is the $146 million in call options that Greenlight was holding, which represented 275,000 shares. The filings don't disclose details on these contracts such as strike price or expiration, but I think it's highly unlikely that Einhorn would load up on near-term options that could go to $0 within a matter of months.

Assuming he wasn't long near-term contracts, the most likely possibility is that he sold the options and bought more shares. Even if they were in-the-money, sophisticated investors almost never exercise prematurely, since doing so forfeits any remaining time value left in the price while cashing out only the intrinsic value. Only options that are extremely deep in-the-money or have very little time remaining are worth exercising, since there will be little to no time value factored into the price.

As bullish as Einhorn has always been on Apple, he just got even more bullish.