Chanos says he is still ‘maximum short’ Tesla even with drop in last month

Jim Chanos

Scott Mlyn | CNBC

Founder of hedge fund Kynikos Associates and well known short seller Jim Chanos said on Thursday that he is still betting against Tesla, even after the electric automaker’s stock fell dramatically in the past month.

“We are still basically maximum short Tesla. It’s still one of my favorite positions,” Chanos told CNBC’s “Halftime Report.” “Nothing’s changed in my viewpoint here … It will lose money this year.”

Tesla shares slipped 2% in trading from its previous close of $418.56.

Chanos said his firm warned clients that Tesla’s recent rally from about November to February wouldn’t last. The stock more than doubled during that time, surging above $950 a share and peaking in early February.

“[That] was one of the craziest periods I’ve ever seen in my 40 years on Wall Street,” Chanos said.

Since hitting that peak Tesla’s stock has fallen more than 51%.

‘Manic’ speculative trading was the missing part of the recent bull market

Chanos highlighted “parabolic” moves in stocks like Tesla and Virgin Galactic as indicative of the end of the bull market cycle.

“That was the one thing that had been missing in the bull market in the 10 years, was just manic speculation by individuals,” Chanos said.

Both stocks had become favorites among retail investors, with trading platforms like Fidelity, TD Ameritrade Robinhood and SoFi all seeing heavy trading volume as the stocks jumped day after day. At one point Virgin Galactic’s stock had more than tripled in just three months.

“Retail for some reason came pouring into the market and individual names and individual stories in a way that we haven’t seen since … the end of the dotcom boom” in early 2000 Chanos said.

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