• 4 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 7 minutes Middle East on brink: Oil tankers attacked off Oman
  • 11 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 14 minutes The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 34 mins The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 8 hours US Shale Drilling lacks regulatory body.
  • 2 hours Ireland To Ban New Petrol And Diesel Vehicles From 2030
  • 5 mins The Plastics Problem
  • 3 hours Solar Panels at 26 cents per watt
  • 3 hours Trudeau approves Trans Mountain Pipeline
  • 1 hour Venezuela's Maduro sneaks $300 million of gold out of country to Africa.
  • 6 hours Huge UK Gas Discovery
  • 15 hours Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 15 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 8 hours OPEC, GEO-POLITICS & OIL SUPPLY & PRICES
  • 7 hours Malaysia Oil & Gas Updates
  • 1 hour Coal Boom in Asia is Real and a Long Trend
  • 44 mins Fareed Zakaria: Canary in the Coal Mine (U.S. Dollar Hegemony)

Breaking News:

Oil Stabilizes On Small Crude Draw

A Geopolitical Energy Grenade In Europe

A Geopolitical Energy Grenade In Europe

A geopolitical energy grenade is…

Tesla Is “Headed For A Brick Wall”

Tesla

Short sellers, beware. Famed short trader Jim Chanos believes that Tesla shares are “headed for a brick wall” in the near future, according to a new report by Bloomberg.

“Every bull market has its poster children,” Chanos, who heads the hedge fund Kynikos Associates Ltd, said at an event in Detroit. “Tesla is one of the bad ones.”

Chanos has been playing the short game with Tesla for a while now. When the Elon Musk-led car manufacturer decided to merge with SolarCity back in September 2016, he deemed the merged company to be a “walking insolvency.” Tesla shares spiked to $339.03 within a few days.

Chanos has built his reputation on betting against Enron – a major trade that worked to his benefit when the infamous accounting scandal made headlines. But his latest predictions have been a little off. He also believes the in the near future, Tesla will lose Musk to SpaceX, the visionary’s space exploration company aiming to reach and colonize Mars through private sector development.

“What Elon did was simple: He made EVs sexy,” Chanos said. “Prior to that you had to compromise and get something like a Prius. But now he has the entire auto world that has figured that out and is coming up with aspirational cars. He’s fighting a different fight.”

Chanos has also made some headlines shorting Continental Resources last month. He argues that shale companies simply have to spend too much to keep production going. Shale drillers “are creatures of the capital markets,” he told Bloomberg. “Because the wells deplete so quickly, they constantly need to raise money to replace the assets. And this is the crux of the story.”

Another significant observation is that the shaky financial position for some shale drillers also suggests that the downside risk to oil prices might not be as serious as once thought. The oil market has tried to assess how quickly shale production would come roaring back. Reports that shale companies were posting juicy profits at very low oil prices has likely factored into heady projections for shale output. The EIA has repeatedly projected that shale output would average 10 million barrels per day next year (although they have revised that down recently to just 9.8 mb/d).

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Marcus Rönningås on December 15 2017 said:
    It leaves a bitter aftertaste that someone that has created nothing is mentioned in the same context with Elon, who regardles of what will be remembered as the person who started the EV (r)evolution.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News