Chanos Says He Won With SunEdison Short After Reversing Viewby and
‘We made money but we could have made more,’ he says
Investor decided on short after SunEdison-Vivint deal news
Jim Chanos, the short-seller who predicted the collapse of Enron Corp. in 2001, said he made money shorting now bankrupt solar developer SunEdison Inc.
The founder of Kynikos Associates said in an interview Thursday that he’d been long SunEdison and short one of its holding companies, a yieldco. After SunEdison announced a deal to purchase Vivint Solar Inc., Chanos said he changed his mind and decided to short the company. By the time he initiated the trade the shares had already dropped somewhat, he said.
"We made money, but we could have made more," he said.
SunEdison announced the Vivint deal in July, after a six-continent buying binge of wind and solar farms. At the time, SunEdison agreed to pay $2.2 billion for Vivint, which valued the Utah-based rooftop solar company at a 52 percent premium.
Investor backlash to the announced acquisition was immediate, and SunEdison’s stock fell sharply. In December, SunEdison said the deal had been renegotiated to $1.9 billion. But in March, Vivint scrapped the deal after saying that SunEdison missed some deadlines. SunEdison filed for bankruptcy protection last month.
Once considered a hot hedge fund stock, SunEdison’s fall and subsequent collapse into bankruptcy caught hedge funds including David Einhorn’s Greenlight Capital, Cliff Asness’s AQR Capital Management and Larry Robbins’s Glenview Capital Management wrong-footed. Chanos said earlier this month he’s also betting shares SolarCity Corp., the largest U.S. rooftop solar developer, will drop.
Chanos was attending the SkyBridge Alternative Investment Conference in Las Vegas, where he earlier spoke on a panel about his wager against liquid natural gas giant Cheniere Energy Inc. He criticized the company’s leverage, saying the company’s valuation is too high given its hefty spending and what he sees as continuing low prices for liquid natural gas.