GameStop Foil Citron Research Quits Short Report Publishing

Citron Research's Andrew Left said the high profile short-seller will no longer publish research urging investors to bet against stocks.
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Citron Research, one of the most high-profile short-sellers on Wall Street one of the initiators of the GameStop  (GME) - Get Report phenomenon, said it will no longer produce reports that urge investors to bet against stocks.

The group, lead by Andrew Left, was initially targeted by retail investors from the Reddit chatroom Wallstreetbets for its views on GameStop Corp. GME and was partly responsible for the so-called "short squeeze" that ultimately lifted shares in the money-losing video game retailer more than 1700% over a twelve-day period.

Citron has claimed to be the victim of harassment and threats from Reddit users before pulling its position against the stock late last week. 

S3 Partners, which tracks details on short positions, said there was more than $5.5 billion in bets against GameStop this week, representing 71.8 million shares, and also noted that short-sellers are nursing losses of more than $5 billion since the start of the year.

"Twenty years ago I started Citron with the intention of protecting the individual against the frauds and stock promotions that were all over Wall Street," Left said in a YouTube video linked to Citron's verified Twitter account. "We uncovered more fraud than any non-governmental agency out there and we're proud of the work that we've done."

"But while we started Citron to go against the establishment, we've now actually become the establishment. So, as of today, Citron Research will no longer be publishing what can be considered as short-selling reports."

GameStop shares were marked 63% higher in early trading Friday to change hands at $314.00 each, with AMC rising 65.35% to $14.27 and Bed Bath & Beyond jumping 25.15% to $42.10 each.

The 'Wall Street v Main Street' dynamic has also shifted to Washington, with U.S. lawmakers planning to hold public hearings into the week's events, with a focus on the brokerage firms that restricted trading in certain stocks during the peak of the market's power early Thursday morning.

"People on Wall Street only care about the rules when they're the ones getting hurt," said Senator Sherrod Brown, a Democrat who will chair the upper chamber's Banking Committee.

The Securities & Exchange Commission issued a statement Friday vowing to "protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws."

"Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities," the statement added.