Short-seller Jim Chanos, founder of Kynikos Associates, said he was short LendingClub Corp., the fintech firm whose shares have tumbled 66 percent so far this year.
Chanos, speaking in an interview with Bloomberg Televisions Erik Schatzker, said he was spurred to short the company because we had problems with the model itself. He declined to say if he was still short the stock or when he took the position.
LendingClubs Chief Executive Officer Renaud Laplanche resigned on May 9 after an internal review found abuses tied to the sale of loans and a failure to disclose a personal interest in an investment fund.
Chanos said shadow banking is growing in the U.S. and hes seeing it everywhere from vacation timeshares to specialized auto retailers and jewelry stores that finance and sell service contracts for wedding rings.
Chanos said hes shocked that hedge fund fees have stayed too high for too long, calling the situation “ridiculous,” and that managers shouldnt get paid for hugging an index. He said managers are increasingly crowding into bets like Valeant Pharmaceuticals International as they struggle to generate alpha returns.
Calling the condition in China worse than most people think, he said hes shorting Chinese second-tier banks, shadow banks and asset managers.