Why skeptics who bet against Elon Musk and Tesla may now regret move

Prominent investor Jim Chanos acknowledged Thursday that he missed the boat in betting against Tesla as he praised the company's mercurial chief Elon Musk, according to Bloomberg.

File photo of Tesla CEO Elon Musk who is now the world's second-richest person. (REUTERS)
File photo of Tesla CEO Elon Musk who is now the world's second-richest person.

Chanos, founder of short-selling firm Kynikos Associates, said his bet against Tesla became a dramatically bigger liability over the last year as shares of the company have soared.

"It's been painful, clearly," said Chanos, who said he has reduced his exposure to the trade.

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Shares of Tesla were up 4.3 percent around midday at $593.50 following an upgrade from Goldman Sachs. Tesla's price is now more than seven times its level at the end of 2019.

Chanos, who rose to fame by betting against Enron prior to its collapse, is the latest big name to be fed humble pie over the electric car company, which encountered early stumbles in its production ramp up but his hit its stride more recently.

Musk has frequently dismissed such shortsellers as "haters."

In 2018, Citron Research reversed course on Tesla to a "long" position, meaning it was betting on shares appreciating as Tesla boosted output of the Model 3 car.

Chanos has never met Musk, but if they were to cross paths, "I'd say, 'job well done so far,'" he told Bloomberg.

Tesla shares have been on a tear since S&P Dow Jones Indices announced on December 16 the company would added to the prestigious S&P 500.

On Thursday, the company got another lift after Goldman Sachs boosted its price target to $780 from $455, saying the shift towards battery electric autos "is accelerating and will occur faster than our prior view."

First Published Date: 05 Dec 2020, 08:48 AM IST
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