Citron is no longer short on GME, citing ‘market rationality’.
Citron Research, one of GameStop's most prominent short sellers, is not short on GameStop ( GME ) stock.
The prominent short-seller closed out his GME short position citing “market irrationality” and “cult-like” shareholder behavior, Citron Research announced in a June 12 X post:
“Citron is no longer short $GME. Not because we believe the company will fundamentally change, but because they have $5 billion in the bank and enough runway to please their cult-like shareholders.
The announcement came shortly after GME's share price rose above $30, following a 22.8% intraday rally on Tuesday. GME is currently trading at $30.49, up 3.3% in premarket trading, according to Google Finance data.
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Citron cites Dogecoin's value at $20 billion
Wedbush GameStop analyst Michael Pachter has set an underperform rating on GameStop, with a 12-month price target of $11, indicating a more than 60% correction from today's price.
Despite the price target, Citron Research has decided to exit its short position due to rationalization in the capital markets, according to the company's X-Post:
“While Wedbush has set a target of $11 today, we respect the market's irrationality. After all, Dogecoin remains part of the $20 billion. While the increased stock count may temper public sentiment, Citroën sees it on the sidelines for the time being.
Citron is presented alongside the world's largest memecoin, Dogecoin (DOGE), which currently sits at a market capitalization of $20.2 billion, without providing any underlying utility or intrinsic value to users. The value of memecoins like Dogecoin is only generated by social media hype cycles and risk appetite.
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GameStop paid $2.14 billion in the lineup.
Amid a brief squeeze by retail investors, GameStop sold 75 million GME shares after completing an “on-market” equity offering on June 11, raising $2.14 billion.
The equity raise comes days after GameStop's stock was fueled by Roaring Kitty's first live stream in three years. Roaring Kitty, or Keith Gill, is known as the main orchestra of GME's short compression.
Citron Research called Gill's recent live broadcast “an insult to the capital markets.”
According to a June 2 Reddit post, Gill held $181.4 million in GME stock and call options.
Gill's screenshot shows that GME bought five million shares for $115.7 million and put $65.7 million in call options, betting that GME will be at least $20 a share on June 21.
Magazine: Roaring Kitty's GME Shares Hit $1 Billion, BTC Gains Interest, and Other News: Hodler's Digest, June 2-8
