The Financial Association reported on November 20 that with the rebound in US stocks, the most famous Wall Street bear surrendered his arms nearly 40 years after founding his hedge fund.

According to media reports a few days ago, famous short seller Jim Chanos (Jim Chanos) will turn his hedge fund Chanos & Co. (Chanos & Co.) into a family office and consulting firm. Chanos' hedge funds short companies they believe are overvalued or fraudulent.

Chanos told the media that he will no longer operate limited partnerships or offshore funds, but will return external capital to investors.

According to reports, the scale of assets managed by Chanos & Co. has shrunk drastically, from US$6 billion in 2008 to less than US$200 million.

As US stocks rebounded in 2023, it has been difficult for Chanos to profit from his bearish positions. The S&P 500 index has risen nearly 18% year to date, and is expected to rise 7.6% in November. The US stock market rebounded strongly in November due to market bets that the Federal Reserve would begin cutting interest rates in 2024.

Chanos is famous for shorting the company before Enron went bankrupt in 2001. He has also made lucrative bets on troubled payments company Wirecard.

Shorting Tesla is miserable

Chanos has not been optimistic about Tesla for a long time. He previously claimed that “Tesla's shares are worthless,” and that he “is still basically Tesla's biggest shortfall.” He began shorting Tesla in 2016, but reduced his short bets before the electric vehicle company was included in the S&P 500 index at the end of 2020.

In January of this year, he once again stepped up his efforts to short Tesla on the grounds that competition in the electric vehicle market is becoming increasingly fierce. He pointed out that in China, one of Tesla's most important markets, local manufacturer BYD and other car companies occupy a huge market share. Compared to companies that are growing faster in China, Tesla is trading at a higher price.

In fact, throughout 2023, Tesla cut prices for its Model S and Model S models in China and launched lower-cost models in the US to cope with the rise of competitors in the electric vehicle market.

Despite this, Tesla's stock price has risen 90% this year as investors pour into the so-called “Big Seven” of technology. And since 2015, Tesla's stock price has soared by more than 1,500%. The electric vehicle manufacturer currently has one of the highest market capitalization in the world. Shorting Tesla caused serious losses to Chanos' funds.

Editor/Corrine