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Jim Chanos: We think Tesla is worth zero
- echlebek 9y agoI don't understand how a company, which is shipping vehicles that people are lining up to buy, could be worth zero.
- clhodapp 9y agoAs a mildly plausible example, a debt-powered "business" that made and then gave away high-quality vehicles for free would probably get people lining up but would also not be worth anything.
- prepend 9y agoDebt. GM was worth zero a few years ago before bankruptcy. Tesla owes over$1.8B with negative billions in earnings each year. That’s how. I actually believe that they will pull out and eventually turn a profit. But not all do.
- deleted 9y ago[deleted]
- mikestew 9y agoTo answer my own question of “why was this posted?”, I’m going to assume so that we can mock and ridicule Mr. Chanos. I mean, zero? Even he knows that’s not true. Though he might have a reasonable explanation for why he thinks TSLA is worth “more than zero, but not $340” (he doesn’t, BTW), many will have already closed the tab.
- IBM 9y agoHe thinks it's zero because Tesla is overleveraged and the equity will be wiped out in the event of a default.
- mikestew 9y agoYeah, I just clicked a linked story where he gives a more reasoned explanation. Having read that, I’m not saying he’s wrong, but the market is sure as hell saying he is. And we know what they say about markets and irrationality. He’s obviously got a stronger stomach and more money to piss away than I do. (Chanos is short TSLA, and keeps adding to that position, as recently as a month ago.)
- hkmurakami 9y agoOne could likely make the case that "Tesla is worth less than its debt load", and if you believe that Tesla will never turn a profit, then you have the basis for Tesla being worth zero.
- SirLJ 9y agoThis is posted, because Mr Chanos is a very smart man and his ideas are worth reading...
- mikestew 9y agoHad I followed his advice, Fidelity would have wanted their borrowed TSLA shares back a long time ago, and at a significant loss. The only reason he can stick to his own advice in the face of a 60% run-up on TSLA this year is because he’s a lot more loaded than I am.
- WheelsAtLarge 9y agoYes, it's worth zero but all startups are worth zero until they make it to the profit stage. As long as Tesla can get financing and moves forward it's too early to count it out. Investors are still convinced that it will eventually make it to the profit stage.