Short Seller Citron Closes Short Position In GameStop, Says 'It Respects Market's Irrationality'
What were the reasons Citron Research cited for closing its short position in GameStop?
Citron Research cited the market's irrationality and the cult-like behavior of GameStop's shareholders as reasons for closing its short position in the company. In a tweet, Citron stated, "with $5 billion in the bank, they have enough runway to appease their cult-like shareholders. Despite Wedbush setting an $11 target today, we respect the market's irrationality. After all, Dogecoin remains a $20 billion entity." This decision coincided with GameStop's stock rising above $30 and experiencing a 22.8% intraday rally.
How did Citron Research describe GameStop's financial situation and its impact on shareholders?
Citron Research described GameStop's financial situation as deteriorating and viewed the current situation as overvalued. Despite this, the short seller acknowledged that the company has enough cash to appease its cult-like shareholders. Citron Research decided to close its short position and watch from the sidelines for now, respecting the market's irrationality.
What was the market's reaction to Citron Research's announcement about closing its short position in GameStop?
The market's reaction to Citron Research's announcement about closing its short position in GameStop was positive. GameStop Corp (NYSE:GME) stock traded higher on Wednesday after the news. Citron Research tweeted that it no longer has a short position on the stock, and while it is not bullish on the company's fundamentals, it respects the market's irrationality. This change in position led to a 22.80% increase in GME shares, trading at $30.49 at the last check on Wednesday.