GameStop (GME) and Citron Research: A Closer Look

The GameStop (GME) saga involving Keith Gill, popularly known as 'Roaring Kitty,' has sparked controversy over alleged market manipulation. Citron Research, a significant GameStop short seller, has raised concerns about Gill's trading activities, suggesting they lean more towards manipulation than conventional investing. In a recent statement on X, Citron Research expressed skepticism about Gill's actions:

'With $GME, he appears to manipulate the market using a substantial account and a significant near-term option position, lacking a solid thesis. The stock's surge, now up 2,000% from his original video almost four years ago, raises suspicions.'

Citron's accusations of market manipulation coincided with Gill's revelation that he has pocketed over $300 million from his GME position. This windfall potentially positions him to become the first GameStop billionaire if prices continue to soar.

Gill's disclosed screenshot unveils his acquisition of five million GME shares worth $115.7 million, along with a $65.7 million investment in call options betting on GME hitting at least $20 a share by a specified date.

Amid the ongoing scrutiny, Citron Research hinted at the possibility that Gill's trades could be supported by a larger financial entity:

'We suspect someone is backing Gill—his reported finances seem insufficient for this scale of trade. Investors are likely to perceive this situation as an inflated success story that may not last.'

Citron Research's Continued Short-Selling Stance on GME

On June 3, the Kobeissi Letter reported Citron Research's reaffirmation of its short position on GME:

'Citron Research recently reiterated its short stance on GME. Having lost over $100 million shorting $GME in 2021, Citron remains a prominent figure among GME short sellers.'

Notably, Citron Research faced significant losses earlier in 2021, leading to the closure of its short GME positions at a 100% loss due to a surge in retail investor activity catalyzed by Gill.

Currently, GME's stock price reflects a 21% increase on the daily chart and a remarkable 71% surge over the past month, trading at $28 in pre-market trading on June 4.

Retail Investor Pushback Against Citron Research

Citron Research's accusations of market manipulation have ignited a fiery response from retail investors, who challenge the short seller's claims. Notable voices within the GME community have taken to social media to voice their dissent.

One pseudonymous GME investor, Fitzzzy, responded to Citron's allegations, pointing out discrepancies in the short seller's narrative and questioning their investment approach:

'For someone shorting GME, your lack of attention to detail is apparent. Keith Gill was strategically buying calls in late April and early May, leading to substantial gains. These trades outperformed expectations significantly.'

Another skeptic with the username Comedyorwat highlighted suspicions around Citron's own short positions, suggesting inconsistencies in their reported figures.

The discourse took a personal turn when financial researcher Wolf of My Street referenced a past incident involving the FBI raiding Citron Research founder Andrew Left's home, insinuating potential legal complications.

This multifaceted narrative surrounding GameStop, Keith Gill, and Citron Research underscores the complexity and controversy inherent in modern-day financial markets.