Tesla has many detractors but maybe none bigger than hedge fund manager Jim Chanos who has consistently compared Tesla to a fraud and said that its CEO, Elon Musk, was lying and misleading investors.
Now Chanos surprisingly hedges his bet against Tesla – becoming a hypocrite in the process.
Jim Chanos is a famed billionaire hedge fund manager known for short selling companies and making a lot of money when Enron’s scam became public.
He is also a regular market commentator for CNBC and Bloomberg. On those networks, he has often publicized his dislike for Tesla and Elon Musk and how he is betting that the company is going bankrupt.
A new SEC filing about his firm’s holdings shows that he invested about $420,000 (the amount might be a reference to Musk’s $420 per share price target to take Tesla private) in long call options on Tesla’s stock.
That’s a big departure from years of publicly declaring that he was heavily shorting Tesla’s stock and for a man suspected to be behind a popular Twitter handle who has consistently attacked Tesla and Elon Musk claiming that the company is going bankrupt.
The investor previously said that he thinks Tesla is “worth zero“:
“To me, where the stock is now is not the story. I don’t care that it came from $30 or $200 or $300. That’s just meaningless. We think the equity is worthless,”
Chanos’ reversal comes after Tesla’s stock price hit a more than two-year low earlier this year before rebounding strongly over the last few weeks:
While hedging is not uncommon on big short-selling bets, I think it’s completely hypocritical in this case since the guy has been comparing Tesla to a fraud and claiming that Elon Musk is lying.
Would you ever invest in a company you think is “worthless” and its leader is a liar?
In my opinion, you are either all-in on it or you are not. You can’t be claiming that Tesla is worthless and the stock is going to zero, but then just in case, you hedge your bet.
Full disclosure: I am long TSLA.
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