Short Seller Citron Closes Short Position In GameStop, Says 'It Respects Market's Irrationality'

GameStop Corp GME stock is trading higher on Wednesday after short-seller Citron Research closed its short position in the company.

Citron Research tweeted Wednesday that it no longer has a short position on the stock. The short seller is not bullish on the company’s fundamentals.

It said “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. While the increased share count might temper the mob mentality, Citron will be watching from the sidelines for now.”

It seems GameStop continues to impress investors with its cash balance despite its hard luck with its e-commerce strategy, dismal brick-and-mortar store count, and sales decline.

Citron remained on the sidelines for now and snubbed Gill.  

Last week, Andrew Left of Citron said that he cautiously shorted GameStop again, believing market dynamics have changed. He emphasized that his current investment in GameStop is minimal. He noted that the “luster” of the Roaring Kitty-driven hype has faded and views the current GameStop situation as overvalued.

Also Read: GameStop Releases Q1 Results Ahead Of ‘Roaring Kitty’ Event, Files Prospectus To Raise Capital Via Equity Offering

The stock got a boost from the re-appearance of prominent market influencer Keith Gill, popularly known as Roaring Kitty. The company credits Roaring Kitty with attracting retail investors to the stock in 2021. 

Gill reiterated his conviction in GameStop’s value and CEO Ryan Cohen’s vision, voicing the company’s transformation with the growing cash position, the Financial Times reports.

The company used the opportunity to raise cash by selling shares at higher valuations.

GameStop sold the maximum number of shares registered under the ATM program for $2.137 billion.

However, Michael Pachter of Wedbush Securities expressed disappointment at Cohen’s lack of initiatives to boost revenue.

Records show GameStop repaying debt and earning interest from low-risk securities from most of its $1.7 billion share sale proceeds.

Price Action: GME shares traded higher by 22.80% at $30.49 at the last check on Wednesday.

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