Benzinga - by Michael Cohen, Benzinga Editor.
Jim Chanos, a prominent figure in Wall Street known for his bearish market stance, is closing the chapter on his hedge funds that specialize in short selling, The Wall Street Journal reports.
For nearly 40 years, Chanos has been a vocal skeptic of overvalued or fraudulent companies, famously profiting from the downfall of Enron, while enduring losses in his long-standing bets against companies like Tesla and AOL.
In recent times, Chanos has found it challenging to capitalize on his bearish bets, particularly as the market trends upward. “The marketplace for what I do has changed,” he told the Journal.
His firm, Chanos & Co., currently manages under $200 million, a steep decline from its $6 billion peak in 2008.
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This year, the firm's funds have dipped by 4%, in stark contrast to the S&P 500's 19% rise, including dividends. Notably, Tesla Inc's (NASDAQ: TSLA) shares have surged by approximately 90% this year, bolstering the electric car manufacturer's market valuation.
Chanos has been a vocal Tesla bear, recently saying that the EV maker's stock is “ridiculously overvalued.”
At 65, Chanos acknowledges the shifting dynamics of the market. He plans to return most of the investor funds by the end of the year.
While winding down his hedge funds, Chanos will not be stepping away from the financial world entirely. According to WSJ, he intends to pivot his focus towards advisory and research services for a select clientele, in addition to managing some separate accounts.
His current interests include shorting high-priced data storage companies and real estate investment trusts, which he believes will suffer from sustained high interest rates.
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