Legendary short-seller Jim Chanos, one of the best-known voices warning about overvaluation on Wall Street, talked with Pensions & Investments Thursday on Twitter Spaces, and revealed new short positions on technology companies IBM and Block, in addition to his continuing bet against electric vehicle maker Tesla and the crypto platform Coinbase.
In a two-hour interview with P&I Editor-in-Chief Jennifer Ablan, Mr. Chanos compared so-called "legal frauds" such as Enron, which collapsed two decades ago, to FTX and financial bubbles today. He shorts — or bets against — share prices through his hedge fund Chanos & Co., New York.
"FTX is one of the rare modern cases that looks like outright criminality with no one signing off on anything. No board, no CFO. With the caveat that we don't know everything yet, it appears to be large losses at Alameda ... were funded with customer accounts from FTX."
Mr. Chanos doesn't think FTX's failure "will be bigger than Enron, at its peak an $80 billion company. This one is pretty blatant. It's up there with (Bernie) Madoff. Losses were well into the billions, but probably not tens of billions. It's a cut-and-dry case of co-mingling customer accounts."
On FTX's disgraced founder Sam Bankman-Fried's post-collapse explanations and media tour: "I was stunned by what he was admitting in broad terms about the crypto eco-system, on how coins worked, and it was basically a Ponzi scheme. That right there was the first smoking gun."