If you haven't heard about Chanos, you need to know him. You must know the fate of Enron, the big energy-trading company that went broke in 2001. Before anyone in the Wall Street knew it, Chanos already knew that Enron would go bankrupt and he went ahead to short it. The result? He got a huge profit by shorting Enron. Of course, he did not stop there. He went on shorting big of WorldCom, Dell, Hewlett-Packard, and Petrobras etc and all of them were big winners for him. It is not overstating that Chanos is the godfather in identifying and shorting troublesome companies!
So what is Chanos' target now? Well, one of Chanos' top ideas for shorting now is Seagate Technology (STX). STX main business is computer hard drives. This is kind of obsolete business when more and more people are moving towards "cloud" memory. Chanos is betting that STX will suffer when people use more mobile devices using different kinds of memory or cloud services instead of local hard drives.
STX stock has advanced over 4 times in the past 2 years, from $8 to now around $40. So there is a big ditch for STX to tip over, if Chanos is right and usually he is right.
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