Chanos is out talking trash today at the Sohn Conference. He’s not mincing words and paints a picture of Elon Musk as a two-bit huckster and snake oil salesman. His rhetoric is strong, pimp hand even stronger. His track record for Sohn conference short picks is unparalleled.
BID -31%
STX -47%
WDC -28%
PBR -66%
VALE -72%
With a track record like that, I think it’s fair to say Jim is worth listening to when he describes his next short.
He thinks SCTY runs into financing problems in this calendar year and describes TSLA as being something made up in a fictional world, unsustainable and bound to break into 10,000 pieces.
NOTE: Both TSLA and SCTY are owned by E. Musk.
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Musk will shoot Chanos an email from Mars explaining why he wrong
PBR has gone from 2.90 to almost 8.. it’s the next ATGP in the making
I had no idea Jeffrey Gundlach got his start working for Warren Buffet…….as the Geico Caveman…………
Dude, the guy runs close to $85B. Any of us would turn our looks for the position he’s in. Plus, he’s about as transparent as it gets for a major money manager.
There’s a first time for everything. Chanos has been correct so often that when he makes a wrong guess, it won’t hurt him. But it will hurt those who just started following him at the time of the wrong guess.
Elon Musk is brilliant. Of course, that’s no guarantee that all his inventions and companies will do well. Even geniuses fail more often than they lose. Perhaps the big difference between geniuses and the rest of us, is that geniuses just keep on trying more than the rest of us “losers” do. Perhaps geniuses aren’t as afraid to lose as others are.
Chanos is a bone fide smart investor and has been right more times than most big name guys who run concentrated longs. He shorted VRX into the ground which I enjoyed watching. But taking on Tesla, wow, that should be an interesting one.
TSLA is the perfect short:
1) It is loved by the public
2) It is way overpriced and financially troubled. Even if you take out R&D and cap-ex, they still don’t generate enough cashflow to pay the interest on their debt, yet they’re priced on par with companies with 10x their revenue and profit.
Financially, the one thing Musk is doing right is issuing stock to the true believers at inflated prices. Luckily Musk is not motivated by money, or he’d borrow in the bond market and then issue buybacks liek every other misguided, shortsighted company.