Short seller Jim Chanos is skeptical North American energy shale company Continental Resources will be able to pay off its debts in the coming years.
“We are short CLR,” Chanos said at the Delivering Alpha Conference in New York on Tuesday.
“People have been looking at the industry with rose colored glasses. This is a problem with the North American shale business … If we don’t get a big pickup in the company’s fortunes in the back half of the year. It’s going to struggle.”
Short selling is a practice in which traders can bet against a company by selling shares they don’t own and buying them back at a lower price.
Shares of Continental began falling as Chanos gave his negative thesis and were last down about 0.8 percent with about an hour until the close.
Chanos is founder and managing partner of Kynikos Associates, one of the largest short selling investment firms in the world. Chanos is lauded for his prescient negative calls on Enron and Tyco.
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