Citron Research founder Andrew Left is shorting GameStop again, arguing the stock is “extremely overvalued” after its latest meteoric rise. The veteran short seller was burned on his first bet against meme-stock traders’ favorite company in 2021, eventually closing out his short position at a 100% loss and halting the publication of short reports after he said an “angry mob” of fanatical GameStop shareholders harassed him.
But Left, who made his name with big bets against the pharmaceutical giant Valeant and China’s now-defunct property giant Evergrande, told the Wall Street Journal that he made a profit when he bet against GameStop again last month.
The video game retailer saw its shares surge from just over $10 at the start of May to an intraday peak of $64.83 by May 14 after Keith Gill—the trader, and de facto meme-stock leader, who goes by Roaring Kitty—referenced the company in social media posts, leading retail investors to pile in. After that initial surge, GameStop stock eventually fell to a low of $18.93 on May 23, and Left says he was able to close out his short position for a profit during this period, he says.
On Monday, the Citron Research founder doubled down on his bearish bet against GameStop after Gill posted a screenshot on Reddit that implied he owns over $100 million of the retailer’s stock. “When I saw it, I shorted it,” Left told Bloomberg of the Reddit post.
The surge in GameStop shares simply “makes no sense” and shows the U.S. has become a “nation of gamblers,” he said in his Wall Street Journal interview.
GameStop stock has risen more than 33% from its opening price on Monday, but fallen over 23% from that day’s intraday high. That means the potential profitability of Left’s current short position, at least at the moment, depends on the price at which he was able to secure shares for the bet.
Either way, the veteran short-seller said that he did learn not to make large bets against “cult” stocks when he was burned shorting GameStop back in 2021, and his latest short compromises a small portion of his portfolio. “It’s a cult stock. You don’t do that on cult stocks,” he told the Journal. “Fool me once, shame on you. Fool me twice, shame on me.”
