Chanos: I'm Short Tesla And SolarCity
Legendary short-selling pro Jim Chanos detailed why he is short two of Elon Musk's crown jewels: Tesla Motors Inc (NASDAQ: TSLA) and SolarCity Corp (NASDAQ: SCTY).
Speaking at the Ira Sohn Conference, Chanos argued that the recent departures of senior executives at Tesla represent a "red flag" for the company. He also noted Tesla's profitability profile is in question as "this is a company that can't forecast one quarter out."
According to Barron's, Chanos also pointed out that Tesla is having profitability issues with a car that sells above $100,000. He questioned if that's the case, how the company would be able to make a profit on the upcoming Model 3 car, which will have a significantly smaller price tag of around $35,000.
Bloomberg noted that Chanos also commented on SolarCity's business, commenting that the company loses money on every solar installation. As such, the company is getting itself into "financial trouble."
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