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One of Tesla’s best-known bears (NASDAQ: TSLA), Kynikos Associates founder Jim Chanos has revealed he’s cut his TSLA shorts. In what could only be described as an unprecedented development from the short seller, Chanos also noted that if he did meet Elon Musk, he would tell Tesla CEO “a job well done so far.”
Chanos has been running TSLA for five years, and during that time he has been one of the company’s most vocal critics. In 2017, he made headlines by announcing that he thought Tesla was worth $ 0. Chanos also insisted that Tesla and Elon Musk “have a broad interpretation of the truth”, in light of announcements that “have been proven to be false”.
In a recent interview with Bloomberg, Chanos noted that for the first four years, his TSLA shorts were not such a bad bet. But over the past 12 months, with TSLA climbing over 700% and hitting a market cap of over half a trillion dollars, Chanos admitted the experience had been painful. “It was painful, clearly,” he said, adding that he had reduced his short position against the electric car maker.
While Tesla’s rise has been impressive, the business is far from over. TSLA is expected to be added to the S&P 500 later this month, and when it does, it will be taller than all but five of the estimated index members. The company is also quickly building factories in Germany and Texas, where vehicles like the Model Y and Cybertruck will be built.
Chanos argued that he continued to challenge Tesla’s business model and valuation, and he argued that the company’s five consecutive quarters of profitability were due to regulatory credits. Nonetheless, he admitted that if he ever met Elon Musk, he would congratulate him. Although he has never met Musk or had a conversation with the CEO, if they were to meet, “I would say, ‘job well done so far,'” Chanos said.
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