[chanos musk 1] Jim Chanos is taking Elon Musk on, and so far, Chanos seems to be winning. The founder of Kynikos Associates and legendary short-seller Chanos has made bets over the last few months against two of Musk's major endeavors — SolarCity and Tesla — and they're both tumbling. Tesla dropped 2.8% during trading Monday and is now down more than 20% from its recent high on April 6, putting it into bear territory. In October 2015, Chanos questioned the firm's ability to ramp up production in order to fulfill orders. The production worries combined with the company's diminishing technological advantage over other automakers convinced Chanos that Tesla couldn't justify its high-flying stock price. Additionally, Chanos followed those comments up with a mention at last week's Sohn Investment Conference that "a flood of people" have left Tesla in the last few years, and when senior management departs a firm that usually spells trouble. It was reported on Wednesday that two of the company's top engineers would leave the company, the same day that Musk announced he wanted to ramp up production from 50,000 a year to 500,000 by 2018, two years ahead of his original plan. Musk's other big bet, SolarCity, reported dismal earnings on Monday, falling short on both profit and guidance expectations. In after-hours trading the stock fell nearly 20%. It was down 55% for 2016 before Monday's action. Chanos has been short the stock since mid-2015. Chanos has been critical of SolarCity's leasing model for its solar panels, comparing the business practice to subprime lending. He also has said that the capital-intensive nature of the business will make it nearly impossible for the company to make money. The company has recently made an attempt to pivot from growing volumes to reducing costs in order to make SolarCity more efficient. It isn't necessarily that Chanos is going after Musk specifically. He has praised Tesla's products in the past. But the short seller sees two of Musk's big bets as bad business models, and has certainly drawn attention to that fact. SEE ALSO: SOLARCITY IS GETTING WHACKED AFTER EARNINGS WHIFF Join the conversation about this story » NOW WATCH: FORMER GREEK FINANCE MINISTER: The single largest threat to the global economy
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