Mon, Feb 8, 2016
A A A
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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider