Long-time Tesla bear Jim Chanos reduces his short in the company and says his position has been 'painful'
- Legendary short-seller
Jim Chanostold Bloomberg he's reduced the size of his Tesla short, adding that his position has been "painful," for the last 12 months.
- Shares of the electric vehicle maker are up roughly 750% since last year, but Chanos said he still sees issues with Tesla's business model and valuation.
- "We're not max short, but we are still short," he said. "But there's now so many other things to do in the EV space that we found lots of other things that are maybe even crazier than Tesla."
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Legendary short-seller Jim Chanos told Bloomberg he's reduced the size of his Tesla short, though he still holds a position betting on the stock's downside.
He said the first four years of his short position beginning in 2016 were a success, as the broader stock market gained and
But now, the electric vehicle maker is up over 750% in the last twelve months and has a market capitalization of over half a trillion dollars.
"It's been painful, clearly," Chanos said of the last year.
He explained he's reduced the Tesla bet from the maximum short position that his hedge-fund, Kynikos Associates, allows. Chanos said he now sees short opportunities with other companies that may be "riding on the coattails" of Tesla's sky-high valuation, like electric-truck maker Nikola.
"We're not max short, but we are still short," said Chanos. "But there's now so many other things to do in the EV space that we found lots of other things that are maybe even crazier than Tesla."
Though Chanos added he still sees issues with Tesla's business model, valuation, and accounting. While Tesla bulls have touted the company as a clean-energy company and autonomous vehicle company, Chano still sees Tesla as an automobile company, and one that will have to compete with an increasing number of auto manufacturers who are entering into the EV market.
"Every bull market has a stock that people pin their hopes and dreams on," Chanos said. "Certainly one of those stocks this go around is Tesla."
The hedge fund manager pointed out that for the last 12 months, Tesla has not made money from selling cars, but from selling tax credits.
"So for all of their market leadership, and selling $50,000 on average cars, they're still not making any money doing it," he said.
But many on Wall Street continue to bet Tesla has massive upside ahead. Goldman Sachs just upgraded Tesla to a "buy" from "neutral," and raised its price target to $780, a 40% upside from current levels. Goldman analysts said the shift towards battery electric vehicle adoption is accelerating faster than the previously thought, and Tesla is poised to gain from that.
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