Legendary short seller Jim Chanos says he started new short in AMC Entertainment
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Famed short seller Jim Chanos said he initiated a new short position in meme stock/theater chain operator AMC Entertainment (NYSE:AMC) on Monday. AMC shares fell 3.7%.
Chanos explained that he purchased the AMC preferred (NYSE:APE) and shorted the AMC common stock against it, he told CNBC. APE shares jumped 21%.
"Functionally the two securities are the same," Chanos said. "I would guess the Apes will be putting pressure on Mr. Aron if the discount continues to make it freely convertible sooner or later," Chanos said. "That spread is economically an arbitrage."
Chanos said he was short AMC last year and reinitiated his short in the common stock on Monday.
The short seller's comments come after new AMC Preferred Equity (APE) shares began trading on Monday. AMC investors received one unit of APE after the market close Friday through a share dividend. 
The APE shares have a par value of $0.01, but what complicates their valuation is the prospect of it being converted in the future to an AMC common share, portending what could be heavy dilution in AMC stock. AMC can also issue more APE shares, to raise more capital.
AMC short interest is 18.5%.
Earlier Tuesday, Wedbush analyst Alicia Reese kept her underperform rating on AMC and lowered the price target to $2 from $4 given the stock-split effect as APE started trading.
Chanos also disclosed in the TV interview that he's short Zoom Video (NASDAQ:ZM). Zoom (ZM) shares plunged 15% after the communications software company reported second-quarter results that missed estimates and provided soft guidance.