Tesla (NASDAQ:TSLA) Will Fail, All ‘Rentier’ Businesses Fail
Jim Chanos bets that Tesla. Inc. (NASDAQ:TSLA) Elon Musk’s struggling EV company will fail.
Mr. Chanos has identified, and sold short many of the best-known corporate disasters of the past few decades.
He say in an interview Wednesday, that the underlying philosophy of his investment strategy came from the debates he used to participate in with the legendary Julian Robertson of investment firm Tiger Management LLC.
Mr. Chanos said that he used to get invited to Tiger’s lunchs, where he often held investment positions and views at odds with some of Tiger’s fund managers and analysts. The debate over different stocks would rage on.
Mr. Robertson was always interested in the advantage anyone held.
The Big Q: “What is your edge?”
Most of those making investment decisions turned out to lack a sustainable edge and they were undone by the powerful force of reversion.
Whatever Mr. Chanos’s edge is, he has used it to make some of the most celebrated Short-sales, betting against: Enron, Baldwin-United, Commodore International, Coleco, Integrated Resources, Boston Chicken, Sunbeam, Conseco, Tyco International and recently, Valeant Pharmaceuticals, plus many others.
Tesla’s stock has been under pressure 27 February 2018
Notably, at the end of March, Tesla’s bonds came under heavy selling pressure too.
Investors, worried that delays manufacturing the electric carmaker’s M-3 sedans would lead the company to run out of cash, bet against the bonds, pushing the cost of opening up new positions shorting Tesla’s debt to an all-time high.
|NASDAQ:TSLA||283.78||16 May 2018||-0.40||283.83||286.73||281.56||3,723,502|
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bearish (-0.34)||Bearish (-0.28)||Bearish (-0.35)||Bearish (-0.39)|