Legendary short-seller Jim Chanos lambasts AMC day-traders, and says the company's deteriorating fundamentals made him put on a small short position

GettyImages 488325214 — Jim Chanos
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Legendary short-seller Jim Chanos laid into retail day traders in a CNBC interview on Tuesday, saying traders who get burned by abrupt downturns in meme stocks only have themselves to blame.
Chanos said that despite a relatively sunny earnings report on Tuesday, his firm had taken a small short position against AMC, citing deteriorating fundamentals.
While some have positioned themselves as retail cheerleaders, Chanos has not held back in blasting a day-trader community he sees as whiny and immature.
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Jim Chanos, the famed short-seller who predicted the collapse of Enron, laid into retail day traders on Tuesday and revealed a small short position against meme-stock favorite AMC Entertainment.

Chanos, founder of Kynikos Associates, said in an interview with CNBC that traders who get burned by abrupt downturns in meme stocks only have themselves to blame.

"The problem with meme-stock trading is that if it turns out you're wrong or the crowd moves onto something else, your downside can be dramatic," he told CNBC.

Chanos said that despite a relatively sunny earnings report on Tuesday, his firm had taken a small short position - less than 1% of net assets - against AMC, citing deteriorating fundamentals. Box office sales have not fully recovered from the pandemic and the theater chain is still weighed down by debt and expensive facilities, he said.

Chanos added that conspiratorial sentiments among Reddit retail traders - who have adopted the tongue-in-cheek label "apes" - ultimately stemmed from poor timing in buying into the latest hot stock.

"That's why I think you see some of this sentiment from the apes [saying] 'the game is rigged against me.' Well, yeah, the game would appear to be rigged against you if you keep coming in and buying things at 10 times what they're worth!" he said.

While some have positioned themselves as retail cheerleaders, Chanos has not held back in blasting a day-trader community he sees as whiny and immature. Last week, he tweeted that the so-called investors boosting meme stocks were greedy and "entitled," prone to "crying" when they don't get their way.

AMC surged on Tuesday after reporting earnings that showed the company pared back its losses, grew revenue, and raised $1.25 billion from new share issuances. Executives said the company was on track to return to positive cash flow in the fourth quarter.

Read the original article on Business Insider