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It’s not shocking that Jim Chanos added to Kynikos Associates’ Tesla Inc (NASDAQ:TSLA) short. Tesla has been building a long list of bears since straying from its 2017 auto schedules, and Chanos has been short the stock for nearly two years.
What's shocking is why the hedge fund manager bets against Tesla: a belief in CEO Elon Musk’s imminent departure. Chanos told Reuters he foresees Musk relinquishing leadership by 2020 to focus on SpaceX, and that move would not bode well for Tesla.
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"Obviously this is not being valued as a car company, it's being valued on Musk ... he's the reason people own the stock,” Chanos said Tuesday at the Reuters Investment Outlook event.
Chanos said his firm has added to its short position throughout 2017. He also predicted Tesla’s eventual bankruptcy, but didn't provide a timeline.
'Structurally Unprofitable' Business Model
In September, Chanos justified his position based on a “structurally unprofitable” business model weighed down by SolarCity and challenged by rivals’ competitive products.
Tesla's stock peaked and valleyed this month on a significant bottom-line miss, the uncertain fate of electric vehicle federal tax credits, and hype surrounding its Thursday semi-truck unveiling.
At time of publication, shares were trading down 2.1 percent at a rate of $308.63. Shares are up nearly 50 percent over the last two years.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.