Sat, Apr 18, 2015
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. Tiger Global falls 2.9% in March, down 5.3% in Q1[more]

    From Reuters.com: Investment firm Tiger Global Management, one of the hedge fund industry's most closely watched players, told clients that its hedge fund lost 5.3 percent during the first quarter, an investor said on Wednesday. Much of the decline came in March when the fund lost 2.9 percent,

  2. It’s not just hedge funds—IMF study finds stability risks from ‘vanilla’ funds[more]

    From MarketWatch.com: Leveraged hedge funds and banklike money-market funds are the parts of the asset-management industry most associated with risks to financial stability. But a report from the International Monetary Fund suggests that “plain-vanilla” mutual funds and exchange-traded funds also ca

  3. Hedge funds gain 2.4% in Q1 driven by currency and commodity markets[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-b

  4. Hedge funds looking to continue their rally in Q2[more]

    Komfie Manalo, Opalesque Asia: Hedge funds finished the first quarter on a strong note and are looking to continue the rally in the second quarter, said Lyxor Asset Management in its Weekly Brief. The Lyxor Hedge Fund Index is up 0.4% over the week

  5. Hedge funds down -0.17% in March (+1.23%YTD)[more]

    Bailey McCann, Opalesque New York: The hedge fund industry produced an aggregate return of –0.17% in March to end Q1 2015 up 1.23%, compared to the S&P 500 which increased 0.96%, according to the latest data from eVestment. Hedge fund performance returns were mixed in March amid increased equity

 

banner