Tesla (NASDAQ:TSLA) Short Sellers Press Their Bets
Noted Short-seller Jim Chanos of Kynikos Associates continued to add to his Short position in electric car maker Tesla Inc. (NASDAQ:TSLA) throughout the year even as the company’s shares rallied, he said at the Reuters Global Investment 2018 Outlook Summit Tuesday.
Mr. Chanos, who 1st disclosed his Short position in Tesla in May last year, said he expected company co-founder and CEO Elon Musk to step down as CEO by Y 2020 to focus on his private rocketship company SpaceX as competitors such as BMW and Porsche expand their lines of luxury electric vehicles.
“Obviously this is not being valued as a car company, it is being valued on Musk … he’s the reason people own the stock,” Mr. Chanos said.
Shares of Tesla are up 44% YTD, at one point pushing the company’s market value higher than competitor General Motors (NYSE:GM) despite Tesla’s not turning a profit.
On 1 November Tesla reported its largest-ever Quarterly loss and pushed back its target for volume production of its new Model 3 sedan by 3months. The company said it now expects to build 5,000 Model 3s per week by late Q-1 of Y 2018 from its original target date of December.
Despite the production delays, Tesla has been among the most painful for Short-sellers this year, with losses among funds that bet on its decline totaling more than $4-Bthis year, according the data.
“Put it this way,” Mr. Chanos said. “If you wouldn’t be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short? It ticks all the boxes.”
He said the company is burning more than $1-B in cash each Quarter and will have a harder time tapping capital markets if and when CEO Musk ankles.
Tesla did not respond to a request for comment.
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bearish (-0.41)||Bearish (-0.46)||Bearish (-0.27)||Very Bearish (-0.50)|