(Adds GM statement, paragraph 2, adds GM closing stock price)
By Svea Herbst-Bayliss and Nick Carey
BOSTON/DETROIT, April 25 (Reuters) - Greenlight Capital, which has been pressuring General Motors Co to restructure its share class, said on Tuesday it believed the automaker’s shareholders will vote in their best financial interests and support the hedge fund’s two-class stock proposal and nominees for the board.
A representative for GM said Greenlight’s proposal to create two classes of stock represents an “unacceptable risk and is not in the best interests of shareholders.”
In a broad-ranging letter to investors about the first quarter of 2017, seen by Reuters, Greenlight also said it had added three new long positions and exited several short positions. Greenlight is run by billionaire investor David Einhorn.
Greenlight added bets on Conduent Inc, Perrigo Co Plc and an unnamed European financial institution. The hedge fund said it lost money on bets against three Canadian banks.
Greenlight has contended for some time that GM shares are undervalued and says it has a plan to boost the automaker’s valuation.
A spokesman for Greenlight, Jonathan Gasthalter, declined to comment.
Einhorn proposed in late March that the U.S. automaker create one class of stock that pays a dividend and one that does not, but would be tied to GM’s potential growth.
No other GM shareholder has backed Einhorn’s proposal, with Warren Buffett’s Berkshire Hathaway Inc remaining conspicuously silent.
Moody’s Investors Service and S&P Global Ratings said such a structure could hurt the automaker’s credit rating.
Einhorn has since floated three nominees for GM’s board and accused the automaker of misrepresenting his plan to rating agencies, a claim GM has rejected.
“We believe others recognize that the stock is deeply undervalued and when shareholders grasp the math and the extent of GM’s behavior, they will vote with their wallets and for needed change at the Board level,” the letter dated April 25 said.
GM shares closed 0.2 percent higher at $33.99 on Tuesday.
Greenlight also said that Tesla Inc, the electric carmaker that earlier this month briefly passed GM as the most valuable U.S. automaker, was overvalued.
Greenlight said in the letter that sooner or later what it called the Tesla bubble was bound to burst. “There was no catalyst that we know of that burst the dot-com bubble in March 2000, and we don’t have a particular catalyst in mind here,” the letter said. “That said, the top will be the top and it’s hard to predict when it will happen.”
Editing by Matthew Lewis