Citron Research founder Andrew Left is back to shorting GameStop (NYSE:GME) after realizing a significant loss in 2021 doing the same thing. In fact, he shorted GME stock last month following the return of Roaring Kitty on social media but closed his position, only to restart it again.
“I have covered my short from May, and then I re-shorted it today,” said Left in an interview with Bloomberg, adding that his current short is smaller than his short in May.
Shares of the video game retailer soared higher yesterday after a Reddit account associated with Kitty revealed over the weekend that he owned $181.40 million worth of GME stock and $20 calls expiring on June 21. That same position was worth $260 million as of yesterday’s close, based on a new Reddit post.
GME Stock: Citron’s Andrew Left Reveals Short Position
On X, Left noted that Kitty had a “detailed investment thesis” for investing in GME in 2021, which, when paired with high short interest and the Covid lockdowns, created a perfect scenario for a move higher.
“Now, with $GME, he posts with a large account and a significant near-term option position, appearing more like manipulation without a solid thesis,” wrote Left.
However, Left doesn’t believe that Kitty is actually engaging in market manipulation as long as he isn’t trading using material, non-public information. At the same time, Left points out that GameStop carries a much higher price and a much lower short interest than when compared to 2021, shrinking the chances for significant gains.
Left also believes that Kitty is receiving backing from another party due to the large size of his account. The Street notes that Kitty’s GameStop position would be worth around $32 million today if he held all of the 800,000 shares he owned in 2021. That’s way below the $181.40 million he disclosed over the weekend, although he purchased call options on GME before his May return to X, according to The Wall Street Journal.
Either way, Roaring Kitty’s return will likely end similarly to 2021, with many shareholders left holding the bag amid large losses.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
