by David Kranzler
Investment Research Dynamics
“Elon Musk has personified the hopes and dreams of this bull market; Tesla burnishes its results through aggressive accounting; it’s a culture of deception because it is selling self-driving, which doesn’t yet exist.” – Jim Chanos from “We Are In The Golden Age Of Fraud” (Financial Times)
Jim Chanos is perhaps the most well-known remaining short-seller in this market. Don’t be fooled by his demure characterization of Elon Musk and Tesla. It’s calculated diplomacy. The numbers are far more than just polished up to look good and the accounting is not just “aggressive,” it’s fraudulent, and Chanos knows that as well as anyone. Large, successful hedge funds that have lasted as long as Chanos’ Kynikos Capital Partners spend a considerable amount of money hiring private investigators and financial forensic sleuths before putting on and sticking with large short positions. I don’t know if Chanos hires P.I.’s but he knows all well as anyone that the accounting is fraudulent rather than just “aggressive.”