Chanos Said to Recommend Betting Against PetrobrasSimone Foxman and Saijel Kishan
Jim Chanos, known for wagering against stocks he expects to decline, recommended betting against Brazilian state-controlled oil company Petroleo Brasileiro SA, according to two people with knowledge of the matter.
The company exists to serve the state, said Chanos, founder of New York-based Kynikos Associates LP, speaking at the Robin Hood Investors Conference in New York, according to two people in the audience who asked not to be named because the event was private.
Chanos, who predicted the collapse of Enron Corp. in 2001, said in November 2012 that he was short Petrobras, as the Rio de Janeiro-based producer is known, saying that investors buying the stock risk subsidizing failed government policies. In a short sale, an investor sells borrowed shares to bet on a decline, hoping to buy them back cheaper and pocket the difference.
Brazil’s President Dilma Rousseff over the weekend said evidence exists that money was illegally diverted from the oil company. She told reporters the state would seek reimbursement of any funds illegally diverted from the oil company.
Petrobras American Depositary Receipts in New York fell 6.8 percent to $13.92 at 2:59 p.m.