Tesla Mega Bear Jim Chanos Cuts TSLA Short Position & Tells Elon Musk ‘Job Well Done’

Tesla Mega Bear Jim Chanos Cuts TSLA Short Position & Tells Elon Musk ‘Job Well Done’

Image credit: Bloomberg

Founder of hedge fund Kynikos Associates and renowned short-seller Jim Chanos is not as confident as he used to be that shorting Tesla (NASDAQ: TSLA) is a good idea. Chanos said he cut the size of his short position on Tesla.

He told Bloomberg that he had never met Tesla's CEO Elon Musk or spoke to him. When asked what he would tell him if he did, Chanos said: “I’d say, 'job well done so far.'”

The short seller still disagrees with Tesla's business model and valuation. However, he justifies his betting failures on the grounds that retail investors have unconditional trust in Tesla and help keep stock prices up, not that he lacks professionalism.

He said it's easier than ever to find companies that look attractive to sell short, but many bearish bets just don't work. Chanos argues that the firm usually makes about two-thirds of its choices right, but only one-third of its short positions currently pay off.

Tesla continues to show growth in production, sales, and development in various markets around the world. The company's market capitalization has skyrocketed to over $550 billion. In 2020, short-sellers suffered colossal losses on Tesla, which is gradually forcing them to cut their short positions. While short-sellers don't directly admit they were wrong about Tesla, the facts speak for themselves.

In early April 2020, Chanos said his firm had warned customers that the Tesla rally, which ran from November 2019 to February 2020, would no longer last. But we have all heard such statements many times before, which in the end turned out to be false, and simply did not reflect reality.

© 2020, Eva Fox. All rights reserved.


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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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