Greenlight Capital's David Einhorn told his investors that the hedge fund closed its longstanding "short" position in bond insurer MBIA Inc. in the first quarter.

Einhorn, in an investor letter which was reviewed by Reuters and which an investor said was distributed Wednesday night, called MBIA the "third most profitable short position" in Greenlight's history.

A short is a bet that a stock will fall in price. Greenlight had been shorting MBIA "in some capacity" since 2002, according to the letter.

In the letter, Einhorn also said Greenlight "initiated a long position" in German-based chemical company Evonik Industries AG through a private placement.

(Reporting by Matthew Goldstein; Editing by Gerald E. McCormick)