This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Don't Let Citron Research Sour You on Plug Power

Angie's List has fallen since, but it's obvious that the initial reaction was a knee-jerk shakeout of weak hands. There are other examples, and as a full-time trader I witness most of them. Citron rightfully made a name for itself exposing Chinese frauds but its record with American stocks isn't as impressive.

For instance, Tesla Motors (TSLA). On July 30, 2013, the electric-car manufacturer was trading near $136 when Citron announced a short position on the stock. Initially shares dropped, falling almost $10. Yet two days later, the shares had fully recovered and Citron was underwater in its short position.

About a week later, on Aug. 8, Citron announced it added to its short position at a time when shares were about $157, $21 higher than the entry announcement. Once again the shares fell, but by Aug. 23 the shares moved above $160.

Defending its position, Citron Research stated:

"So when Tesla floated its secondary in May at $92/share, Musk was giving a sign. At that price, he thought he was being ambitious to raise over $3 billion at that price per share."

Compare that to Citron's comments on Plug Power on Tuesday:

"The company sold another $22.4 million worth of stock at 15% discount to prior day closing price ($5.75). Even Marsh himself could not ever dream this stock would ever get over $5."

Citron Research makes a point to advise readers that Plug Power's CEO Andrew Marsh wouldn't even buy shares at 15 cents, and management didn't participate in any of the capital raises. However, while perhaps technically correct, it's disingenuous to omit Marsh's purchases shortly after the last two capital raises. Marsh bought over $45,000 worth of stock in two transactions during 2013 according to SEC filings.

Insiders and institutions own over 30% of the shares, a significant percentage considering how many funds won't own stocks under $5, and the company doesn't pay a dividend.

According to Citron Research, the only people claiming these stocks can go higher are the CEOs. Over a dozen investment funds think otherwise.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PLUG $2.05 0.00%
AAPL $95.03 0.21%
FB $116.73 0.00%
GOOG $691.02 0.00%
TSLA $247.54 -0.07%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs