Noted short-seller Jim Chanos revealed a new bet against cryptocurrency exchange Coinbase . "Coinbase is what we would call a bubble stock," the founder of Kynikos Associates said. Chanos announced his new short to CNBC's Scott Wapner on "Closing Bell: Overtime" after Friday's market close. "There are plenty of companies that are in the new economy that have real growth, real cash flows and real earnings, but there's a lot that are just being sold on stories, and we would argue that Coinbase is one that's being sold on a story," Chanos added. Coinbase shares fell about 2% in after-hours trading Friday following Chanos' comments. Chanos said Coinbase currently occupies a "unique market niche," which explains its roughly $40 billion market cap as of Friday's close. "We basically think Coinbase is overearning ... if you look at comparable kinds of exchanges or trading operations," Chanos said. "We think that as competition increases in crypto ... as competition increases amongst the exchanges, you're going to see fee compression, and as it is, Coinbase will probably not be profitable this year," Chanos said. The exchange in its latest quarterly report posted better-than-expected earnings, but warned trading volume would likely fall in the current quarter. Coinbase shares are down 26% this year. The cryptocurrency exchange debuted publicly last April through a direct listing. The stock closed at $185.94 per share, down 51.2% from its opening price of $381. Chanos has a long history of identifying fraud. He made his name betting against energy trading company Enron in 2000 after discovering deceptive accounting practices.
James Chanos and Leon Cooperman at the 2019 Delivering Alpa conference in New York on Sept. 19. 2019.
Adam Jeffery | CNBC
Noted short-seller Jim Chanos revealed a new bet against cryptocurrency exchange Coinbase.