Thu, Nov 26, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund manager Chanos says it’s time to short solar and wind energies

Thursday, May 26, 2011
Opalesque Industry Update – Celebrated short-seller James Chanos, founder of Kynokos Associates, is taking aim at the “greenies” or clean energy companies. Of particular interest to him are solar and wind energies which he said are ripe for shorting.

Arriving at the annual Sohn Conference in New York held on Wednesday, Chanos declared, “We’re gonna upset the greenies. The problem is the companies we are looking at are not capable yet of being baseline power generators. Wind and solar are not efficient.” Chanos has good reason to believe he was right. He said that among the many problems inherent to these green energy technologies are the high cost of maintaining them which discourages demand.

He particularly criticized Vestas, a wind energy firm. Chanos accused Vestas of resorting to questionable accounting practice to make it appear that the firm is financially viable when in truth their cash flow “had turned down dramatically and the company had declining returns on capital.”

But for him, the most exciting sector to short at this time is solar power companies. He described solar companies as inefficient and are more costly compared to gas and coal-powered plants.

Indeed, government policies are pushing people to switch to solar energy rather than genuine demand, Chanos said. Some European countries even reduced their dependence on the use of solar power which has further decreased demand for the technology.

As for the best solar firm to short, Chanos is betting his money on First Solar, which he said is using a questionable old technology and currently experiencing operating problems arising from low-cost competitions.

More bad news for First Solar is that some of its key management officials are leaving the firm. ”They are seeing the same things we are seeing,” Chanos declared. “We advise you to heed their warnings.”

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  3. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac

  4. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  5. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega