Longtime Tesla bear Jim Chanos cuts his shorts in the company, says his position has been ‘painful’

• Legendary short seller Jim Chanos told Bloomberg he has reduced the size of his Tesla shorts, adding that his position has been “painful” for the past 12 months.
• Shares of the electric vehicle maker are up about 750% from last year, but Chanos said he still sees issues with Tesla’s business model and pricing.
• “We are not very short, but we are still short,” he said. “But now there is so much more to do in the EV space that we have found a lot of other things that are perhaps even crazier than Tesla.”
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Legendary short seller Jim Chanos told Bloomberg he has reduced the size of his Tesla shorts, although he still holds a position betting on the stock’s decline.

He said the first four years of his short position from 2016 were successful, as the wider stock market won and Tesla went “to the side”.

But now the electric vehicle maker has grown over 750% in the past twelve months and has a market cap of over half a trillion dollars.

“It was painful, clearly,” Chanos said of last year.

He explained that he reduced the Tesla bet from the maximum short position allowed by his hedge fund, Kynikos Associates. Chanos said he now sees short-lived opportunities with other companies that could “squeeze” out of Tesla’s sky-high valuation, such as electric truck maker Nikola.

“We are not very short, but we are still short,” Chanos said. “But there is now so much more to do in the EV space that we have found a lot of other things that are perhaps even crazier than Tesla.”

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Although Chanos added, he still sees issues with Tesla’s business model, valuation, and accounting. While the Tesla Bulls have touted the company as a clean energy company and an autonomous vehicle company, Chano still sees Tesla as an auto company, which will have to compete with a growing number of automakers entering the vehicle market. electric.

“Every bull market has a stock that people are placing their hopes and dreams on,” Chanos said. “Definitely one of those stocks that’s going around is Tesla.”

The hedge fund manager pointed out that over the past 12 months, Tesla has not made money selling cars, but selling tax credits.

“So despite all their leadership in the market and selling $ 50,000 on average cars, they still aren’t making any money doing it,” he said.

But many on Wall Street continue to bet that Tesla has huge potential ahead. Goldman Sachs just moved Tesla to a “buy” from “neutral” and raised its price target to $ 780, up 40% from current levels. Goldman analysts said the shift to battery-electric vehicle adoption is accelerating faster than expected, and Tesla is poised to capitalize on it.