Tesla (NASDAQ:TSLA) Will Fail, All ‘Rentier’ Businesses Fail

Tesla (NASDAQ:TSLA) Will Fail, All ‘Rentier’ Businesses Fail

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.

The market’s concerns that Tesla will go broke were also fueled by several crashes involving its Autopilot vehicle technology and an exodus of high profile staff.

Symbol Last Trade Date Change Open High Low Volume
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)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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