- The legendary investor who anticipated the Enron collapse 20 years ago has two new short positions.
- Jim Chanos said he’s betting against food-delivery app DoorDash and sports-betting firm DraftKings.
- DoorDash’s net losses caught Chanos’ attention. For DraftKings, it was the marketing spend.
In an interview on CNBC, the founder of Kynikos Associates revealed the two companies as short-selling opportunities. Chanos is well known for anticipating Enron’s historic collapse, which happened 20 years ago today.
For DraftKings, the sports betting firm that went public via SPAC in 2020, Chanos said the company has high marketing costs relative to its actual revenue. In tweets on November 30, he posted a screenshot of the company’s third-quarter revenue and expenses, which showed sales and marketing spending of $303 million compared to revenue of $212 million.
“You can believe in sports betting, but this business model is flawed,” he told CNBC.
As for food-delivery app DoorDash, Chanos told CNBC that even with more people ordering meals to be delivered, the company is still struggling to make a profit. In the third quarter this year, the company reported a net loss of $101 million, wider than the year-earlier loss of $43 million, according to a regulatory filing.
“You’re not making money in the pandemic, when everyone is ordering food and everyone is staying at home and you have a captive audience,” Chanos said. “If not now, when?”
The companies did not immediately respond to Insider’s request for comment.
DoorDash went public a year ago in an epic debut in which it nearly doubled its offering price. But since the IPO, the stock has dropped about 12%. As for DraftKings, the stock has slumped about 30% so far this year.
DraftKings stock dipped just 0.1% ahead of the close Thursday, while DoorDash stock rose 3.5%.