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Jim Chanos Shorting EADS

September 23, 2011 | About:
matsandalex

matsandalex

9 followers
Jim Chanos, who has been a vocal critic and short seller of Chinese property developers, has now revealed a short position in French airplane manufacturer, EADS (EAD.PA) because the company has “some financial issues.”To offset the EADS short position, he invested in Boeing.

Chanos said he was short EADS partially because their expenses are in euros and revenues are in dollars. He is bearish on the euro, meaning he thinks that this will be an earnings drag for EADS relative to Boeing (BA). He was also clear to point out that he does not believe that EADS has Enron style accounting. He merely mentioned that the company has “some accounting issues, cash flow versus earnings.” EADS is not misstating their earnings, in his opinion.

The other highlights of the interview with Jim Chanos are:

  • Chanos continues to be short solar and wind stocks and he added to short positions in the last month. Previously Chanos revealed that he was shorting solar stocks like First Solar (FSLR) because the company will struggle with austerity plans in Germany, Italy and Spain. Chanos was also concerned about the insider selling at FSLR where insiders sold 3.5 million shares of FSLR in the last year.
  • Chanos also mentioned that “we're not short the U.S. banks.” However, he appears to be short some non-U.S. financial companies.
Full interview with renowned short seller Jim Chanos:


Rating: 2.0/5 (4 votes)

Comments

batbeer2
Batbeer2 premium member - 2 years ago
Chanos said he was short EADS partially because their expenses are in euros and revenues are in dollars. He is bearish on the euro, meaning he thinks that this will be an earnings drag for EADS relative to Boeing (BA).

I don't get that. Expenses, in euros, go down. Meanwhile revenue, in dollars, doesn't go down. That's good for profits no ?
augustabound
Augustabound - 2 years ago
Chanos said he was short EADS partially because their expenses are in euros and revenues are in dollars. He is bearish on the euro, meaning he thinks that this will be an earnings drag for EADS relative to Boeing (BA).

I don't get that. Expenses, in euros, go down. Meanwhile revenue, in dollars, doesn't go down. That's good for profits no ?


I wondered the same thing. I know here in Canada, exporters like a weak CDN versus USD. When the dollars are near par, like the last couple of years, they say they lose in the currency exchange.

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