This content is from: Portfolio

Morning Brief: Chanos Still Short Tesla, But Some Others Retreat

The Kynikos Associates founder thinks Tesla’s CEO will resign by 2020; meanwhile, some short sellers have covered their positions.

  • By Stephen Taub

Kynikos Associates’ Jim Chanos boosted his short position in electric car maker Tesla throughout the year, the noted short seller said at the Reuters Global Investment 2018 Outlook Summit on Tuesday. He said he believes founder Elon Musk will resign as CEO by 2020 to spend most of his time on his private rocket ship company SpaceX, according to Reuters.

“Obviously this is not being valued as a car company, it’s being valued on Musk ... he’s the reason people own the stock,” Chanos told the audience. As we have reported several times, David Einhorn’s Greenlight Capital also has a sizable short position in Tesla, one of the most widely-shorted stocks.

Ihor Dusaniwsky, managing director of Predictive Analytics at S3 Partners, a financial analytics firm, reported on Tuesday that Tesla’s short interest hit a historical high on September 21, with 31.3 million shares shorted at a market value of $11.5 billion. Since then, some shorts have covered their positions, reducing the number of shares shorted to 28 million shares, worth $8.6 billion.

Still, short sellers suffered $4.1 billion in mark-to-market losses for the first three quarters of the year, according to S3. Since September 18, however, the stock has fallen more than 19 percent, enabling shorts to recoup some of their losses. Even so, the stock is still up 46 percent for the year.

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Nelson Peltz was right after all. Procter & Gamble announced on Tuesday that the co-founder of Trian Fund Management won a seat on the packaged goods company’s board of directors by the narrow margin of 0.0016 percent of shares outstanding, or just 42,780 shares, citing preliminary results. The voting tabulation was made by IVS Associates, Inc. “The results are still preliminary and are subject to a review and challenge period, during which both parties will have the opportunity to review the results for any discrepancies,” P&G states in its announcement. It said the final results are expected “in the weeks ahead.”

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Darsana Capital Partners disclosed that as of November 1, it boosted its stake in Gray Television to nearly 4.2 million shares, or 6.29 percent of the broadcasting company. It owned 3.3 million shares at the end of the third quarter.

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