Weak Earnings and Short-Sellers Combine to Send Cheniere Energy's Stock Plummeting in May
Another reason why Chenere's stock seemed to struggle so much is that famous short-seller Jim Chanos continued to make bearish comments about Cheniere's business model, and its current valuation. Cheniere Energy's stock has been in Chanos' sights for several months now, and he continues to say on any occasion given to him that the stock is wildly overvalued considering the amount of time it will take for the company to generate any real profits. So far, Chanos' short position has paid off rather well, as Cheniere's stock has tumbled precipitously since Chanos went public with his position a little less than a year ago.
Now What: New CEO Jack Fusco certainly has his hands full. Now, rather than simply managing the construction of the new facilities, Cheniere has to prove that it can be an efficient operator. Anyone who is considering investing in Cheniere Energy has to remember that this is still a bit of an unknown with the company, and it will take a long time before the investment thesis Cheniere has presented plays out. So for the time being, it's probably worth not looking too much into this past month's stock swing, and waiting to see how the company performs as it brings more of its LNG export capacity online.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
