CONSOL Energy CNX
Market prices CONSOL as a dying coal miner, but its Marcellus/Utica shale gas acreage plus disciplined management make it worth $35.81/share versus $7.40 today.
Thesis
David Einhorn pitches CONSOL Energy (CNX, $7.40) as a misunderstood energy company that Wall Street mistakes for a dying Appalachian coal miner but which is really a Marcellus/Utica shale gas powerhouse. Through segment DCFs he values thermal coal at $3bn, metallurgical coal at $490M, legacy coalbed gas at $900M, CONE Midstream at $667M, non-core divestitures at $500M, and the 1M-net-acre shale gas business at $6.6bn — totaling $8.2bn, or $35.81 per share, almost 5x the current price. Unlike Pioneer Natural Resources (his May 2015 Sohn short), CONSOL's management has stopped drilling at negative returns, is selling non-core assets, and will likely separate gas from coal to force a re-rating. Einhorn frames CNX as the mirror image of his Pioneer short: same fracker mechanics, opposite direction, with the Arkema precedent as his riding-out-the-cycle template.
SCQA
CONSOL Energy trades at $7.40 with a $5.5bn enterprise value; the market prices it alongside bankrupt Appalachian coal miners as thermal coal demand falls and the whole industry looks left for dead.
Wall Street ignores that CNX is really a gas company — 1M net Marcellus/Utica acres, the lowest-cost Northern Appalachia coal, midstream stakes, and a management team disciplined enough to stop drilling when returns go negative.
Hold the stock while management divests non-core assets, pays down debt, and separates the natural gas business from the coal business — forcing the market to value the shale acreage like pure-play E&Ps.
Sum-of-parts values CONSOL at $8.2bn, or $35.81 per share — nearly 5x the current price — with additional optionality if gas prices recover from today's $2/mmbtu lows toward energy-equivalence with oil.
The three reasons
- 1
Market prices CNX as dying coal, but it is really a Marcellus/Utica gas company
- 2
Sum-of-parts is $8.2bn or $35.81/share — almost 5x the $7.40 stock price
- 3
Disciplined management has stopped drilling at negative returns, unlike Pioneer
Primary demands
- Maintain capex discipline — defer new shale drilling until economics improve
- Continue divesting non-core assets and paying down debt
- Separate the natural gas business from the coal business to force a re-rating
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Arkema (Greenlight's own prior cyclical — bought at wrong part of cycle, rode €10 back to €70)
- Pioneer Natural Resources short (Greenlight's May 2015 Sohn 'Mother-Fracker' thesis — mirror image)
Notable slides (6)
Notes
Classic Einhorn Robin Hood deck — every slide title is a pun ('Coaled cocked', 'Old King Coal', 'Dethroned', 'Faked over the coals'). Unusual opener: Einhorn admits Greenlight bought too early and looks 'stupid for owning it,' using his prior Arkema experience as the mental model. Pairs as a companion to his May 2015 Sohn 'Mother-Fracker' short on Pioneer — same fracker DCF mechanics, opposite direction. Thesis is less 'activist demand' than 'misperception trade': CNX is a gas company the market prices as coal. Management is praised rather than attacked; implied catalyst is a gas/coal separation that management has signaled. Heavy use of editorial cartoons (New Yorker-style) and memes. Notable slide 71 quotes Pioneer's CEO (not CNX's) needling Einhorn about driving a Tesla — subtle contradiction-reveal, but directed at his prior short, not this long. Deck runs to page 79 plus ~28 pages of DCF appendices.