Short-seller Andrew Left, the owner and founder of Citron Research, is once again taking a bearish stance on GameStop, despite facing a 100% loss in his previous bet against the company. Left believes that GameStop’s stock is currently ‘extremely overvalued’ following its recent significant increase.
In 2021, Left suffered a substantial loss when he initially bet against the popular meme-stock company, eventually closing his short position at a complete loss. However, he recently revealed to the Wall Street Journal that he managed to profit from his latest short position on GameStop.
GameStop’s stock price experienced a notable surge in May, rising from just above $10 to a peak of $64.83 after social media influencer Keith Gill, known as Roaring Kitty, mentioned the company in his posts, attracting a wave of retail investors. Despite the subsequent decline in GameStop’s stock to $18.93, Left claims he was able to capitalize on this fluctuation and profit from his short position.
Left reinforced his bearish outlook on GameStop after learning that Gill may hold over $100 million worth of GameStop stock, prompting him to short the stock further. He criticized the stock’s surge, labeling it as irrational and indicative of a gambling mentality prevailing in the U.S. market.
Although GameStop’s stock has seen fluctuations, with a rise of over 33% on Monday followed by a 23% decline from its peak, the profitability of Left’s current short position hinges on the specific price at which he secured his shares for the bet.
Reflecting on his past experience, Left acknowledged the risks associated with shorting ‘cult’ stocks like GameStop and emphasized that his current short position represents only a small portion of his overall portfolio. He emphasized the importance of learning from past mistakes and avoiding significant bets on such volatile stocks.
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