Short seller Jim Chanos ramped up his bet against Tesla last quarter - and placed new wagers against AMC and Trump-linked DWAC
- Jim Chanos boosted his bet against Tesla and placed wagers against many other companies.
- The short seller's fund bought put options on AMC, Trump-linked DWAC, and MicroStrategy shares.
Jim Chanos ramped up his bet on Tesla shares to tumble, and placed wagers against a raft of meme stocks, cryptocurrency companies, and high-flying technology names last quarter.
The famed short seller's fund, Chanos & Company, held bearish put options on 5,900 Tesla shares at the end of September. It boosted that to 131,000 shares as of December 31, a Securities and Exchange Commission filing revealed on Tuesday.
Put options grant their holders the right to sell a stock at a fixed price by a certain date, and typically pay off if the stock falls in price. Chanos and his team went from having four puts out of 19 positions in their US stock portfolio at the end of September, to 44 puts out of 60 total holdings by December's close.
Their new targets included AMC Entertainment, a favorite among meme-stock fans, and Digital World Acquisition Company, the SPAC tied to the former US president, Donald Trump. They also took aim at crypto players including Block, Coinbase, and Microstrategy; and tech upstarts such as DoorDash, Zoom, Wayfair, and Lemonade.
Chanos has repeatedly called out dangerous levels of hype surrounding many popular stocks and crypto. He described the market backdrop as the "dot-com era on steroids" on Bloomberg's "Odd Lots" podcast in November, and dismissed the crypto craze as pure speculation and a money grab for the businesses involved.
Moreover, the veteran investor said he was short Tesla because he expects the electric-vehicle maker's growth to slow and its profits to shrink. He cited mounting competition from legacy automakers, and the relatively small size of the luxury-car market, as major headwinds for Elon Musk's company.
In a RealVision interview in October, Chanos called Tesla a "hopes-and-dreams stock," as its fans imagine it will disrupt multiple industries such as robotics, batteries, energy, and autonomous driving. Moreover, he warned that many tech companies today have flawed business models that don't make money when interest rates aren't near zero.
Chanos has loudly criticized the likes of AMC and DoorDash on his Twitter feed in recent months. Given his clear skepticism towards meme stocks, crypto, and supposedly disruptive tech companies, it's no surprise he's put more money into puts.