Citron Exits GME, Blames Market Irrationality
Citron Research, one of the leading voices among GameStop short sellers, has officially closed its short position on GameStop (GME) stock. The firm announced its decision amid what it described as “market irrationality” and “cult-like” behavior from shareholders. In a post on June 12, Citron Research declared, “Citron is no longer short GME. It’s not because we believe in a turnaround for the company’s fundamentals, but with $5 billion in the bank, they have enough runway to appease their cult-like shareholders.”
This announcement followed a significant rise in GME’s stock price, which jumped above the $30 mark after a 22.8% rally in a single trading day. At present, GameStop is trading at $30.49, showing a 3.3% increase in pre-market trading. This information was provided by Google Finance data.
Michael Pachter, an analyst at Wedbush Securities, maintains an “underperform” rating on GameStop, with a 12-month price target of $11. This forecast implies a substantial drop of over 60% from its current price. Despite this bearish outlook, Citron Research chose to exit its short position, highlighting the unpredictability in today’s capital markets. They noted, “Despite Wedbush setting an $11 target today, we respect the market’s irrationality. After all, Dogecoin remains a $20 billion entity. While the increased share count might temper the mob mentality, Citron will be watching from the sidelines for now.”
Citron Research drew a comparison to Dogecoin, which has a market capitalization of $20 billion. Despite lacking any intrinsic value or practical utility, Dogecoin’s valuation is propelled entirely by social media buzz and speculative risk appetite, much like GameStop’s recent price actions.
During the frenzy driven by retail investors, GameStop capitalized on the market rally by raising $2.14 billion through an “at-the-market” equity offering. This offering, completed on June 11, involved the sale of 75 million GME shares. Remarkably, this equity raise took place just days after an influential livestream by Roaring Kitty, also known as Keith Gill, who played a central role in orchestrating the initial GME short squeeze.
Citron Research criticized Roaring Kitty’s latest livestream, referring to it as “an insult to capital markets.” Keith Gill, who is celebrated among retail investors, was reportedly holding $181.4 million worth of GME stock and call options according to a Reddit post on June 2. The post included a screenshot that showed Gill had purchased 5 million GME shares for $115.7 million and invested $65.7 million into call options, betting that GME would be at least $20 per share by June 21.
This market situation highlights the growing influence of social media-led investment strategies, which have often resulted in unexpected volatility and significant financial events. Retail investors continue to leverage online platforms to orchestrate market movements that challenge traditional financial dynamics.
Despite the ongoing market turbulence, Citron Research’s decision to close its short position on GameStop reveals the complexities of dealing with a stock heavily influenced by social sentiment. It also underscores the challenges faced by traditional investors when navigating markets driven by non-fundamental factors.
For now, Citron Research plans to monitor the situation from the sidelines, leaving an open-ended question about their future actions in a market that seems to be increasingly driven by unpredictable social dynamics and collective investor behavior.
30 thoughts on “Citron Exits GME, Blames Market Irrationality”
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Citron’s exit from GME reflects the sheer unpredictability of today’s market. Kudos to retail investors! 💪📉
Citron backing off GME shows how dominant retail investors have become! Power to the people! 💪
Social sentiment wins again! Citron, smart move closing that short position on GME.
From short to sidelines, Citron Research’s strategy shift tells us a lot about the new market era were in!
Comparing GameStop to Dogecoin? That’s a stretch. Citron is just bitter.
The market’s irrationality at its finest! Well played, Citron Research. GameStop is on fire!
GME’s rise and Citron’s move is a lesson in market dynamics. 🌟 Onwards and upwards for GameStop! 🚀
Keith Gill may be celebrated, but calling his livestream an ‘insult’? That’s just petty.
Public sentiment really turned the tables for GameStop! Citron Research must have seen the writing on the wall.
Citron whining about market unpredictability? Welcome to the world of investing! 🥴
The power of social media-driven trading is real. Great call Citron! 📈👏
GME to the moon! It’s crazy to see institutions adjust to the power of social media-driven investments!
Honestly, Citron Research sounds super salty right now. Sorry your short didn’t work out!
Citron calling out Roaring Kitty… sounds like they’re trying to shift the blame.
Sure, blame ‘social sentiment’ instead of admitting you made a wrong bet, Citron.
Incredible move by Citron Research! The unpredictability of GME seems to challenge even the top players in the market. 🐱🚀
Disrespecting retail investors seems to be Citrons go-to move. Why am I not surprised?
Interesting turn of events with Citron and GME! This market is really something else.
Citron Research being cautious shows just how unpredictable GME has become. Market sentiment rules!
Citron Research talking about ‘market irrationality’ like they haven’t been fueling it themselves. Hypocrites! 🚫
GME is the new Dogecoin? Amazing to see how market sentiment plays such a pivotal role. Smart move by Citron!
Smart move, Citron! GME is unpredictable, but thats exactly what makes it exciting.
Citron’s constant negativity towards GME shows they’re out of ideas. Time to evolve or step aside!
GMEs influence continues! Citron Researchs move shows the power of the people.
GME and social media are changing the game! Citrons decision is just another chapter in this saga.
Citron siding with caution on GME acknowledges the new market influences at play. Retail investors stay strong!
Citron Research exiting GME is a testament to the power of retail investors.
Wow, amazing how much power retail investors have! Well, citrin Research made a smart move. GME gang rise!
billion in GMEs bank is no joke! Great call by Citron to bow out gracefully.
Retail investors 1 – Institutions 0! Big ups to Citron for recognizing the unpredictability in GME.