Greenlight Capital Sold Seadrill (SDRL) in Q4 as It Missed the Inflection

Greenlight Capital, an investment management company, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Greenlight Capital’s investment strategy focuses on constructing a bottom-up portfolio comprising undervalued long positions and overvalued short positions, while also including a macro book to hedge risks and capture insights. The Partnership returned 9.0% (net) in 2025 compared to 17.9% for the S&P 500 index. In contrast, it returned 8.5% in Q4, compared to 2.7% for the index. The Partnership has returned $6.1 billion, net of fees and expenses, to its investors since its inception in May 1996.  For more information on the Partnership’s top picks in 2025, please check its top five holdings.

In its fourth-quarter 2025 investor letter, Greenlight Capital highlighted stocks such as Seadrill Limited (NYSE:SDRL). Based in Hamilton, Bermuda, Seadrill Limited (NYSE:SDRL) offers offshore contract drilling services to the oil and gas industry. The one-month return of Seadrill Limited (NYSE:SDRL) was 10.64%, and its shares gained 6.94% of their value over the last 52 weeks. On January 29, 2026, Seadrill Limited (NYSE:SDRL) stock closed at $38.67 per share with a market capitalization of $2.412 billion.

Greenlight Capital stated the following regarding Seadrill Limited (NYSE:SDRL) in its fourth quarter 2025 investor letter:

"We exited HP Inc. (HPQ) with a tiny gain and Seadrill Limited (NYSE:SDRL) with a tiny loss. In both instances, our initial thesis was correct and we had early gains, but we overstayed our welcome. In SDRL’s case, our thesis rested on rising day rates for drilling rigs. We missed the inflection and wound up with an unremarkable outcome."

Seadrill Limited (NYSE:SDRL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Seadrill Limited (NYSE:SDRL) at the end of the third quarter, up from 28 in the previous quarter. While we acknowledge the potential of Seadrill Limited (NYSE:SDRL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Seadrill Limited (NYSE:SDRL) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.