Jim Chanos Bets Against Grubhub
Jim Chanos made a name for himself betting that Enron would collapse in the early 2000s. Now the short-seller is betting against Grubhub (NYSE: GRUB), a leading restaurant delivery company whose stock has already been battered over the past year. The stock had shed about 5.1% by 1:10 p.m. EDT Thursday.
Chanos revealed his short position on CNBC's Halftime Report on Thursday. He believes that a combination of lower fees and higher employee costs will become a massive problem for Grubhub in the future.
As it stands, Grubhub barely makes any money. "Right now, Grubhub is making almost no money per order -- it's something like 15 cents. There's just no margin in this business," Chanos said. The situation is expected to get worse, as pressure from both competition and new labor laws eat into the company's paltry bottom line.
Source Fool.com
