Tuesday, February 7, 2017

As NVIDIA Hits Intraday and Closing All-Time Highs Citron's Mr. Left Has a New Tactic (NVDA)

In Feb. 2nd's "How the Hell Did Bloomberg Do An Article On Andrew Left's Latest Short Target And Not Mention His NVIDIA and Tesla Short Fails?" I mentioned Mr. Left had initiated radio silence on his NVDA short with earnings a week away.

We're now less than 48 hours from the earnings report and today the stock hit an intraday all-time high of $120.90 and booked its all-time closing high at $119.13. The thing to take away from that Feb. 2 post? A re-reference
...Regarding Mr. Left and Citron, he was probably seeing the same thing we, and Investor's Business Daily and just about anyone else paying attention were seeing.

And calling for a short he's playing a dangerous little game. Here are a couple prior posts to get at what I'm trying to say:...

...At least he's talking the right stuff. In a bull market the only place to risk a short is in the questionable companies whereas in a bear going after the valuation shorts can also give you an acceptable risk/reward....
It is just so dangerous to say both your valuation and your timing are superior to the market.
So dangerous.

Here's the latest, from DealBreaker:

Citron’s New Short Strategy: Chumming For Trump
trump-citronWe’ve written plenty on the career of the Trump-tweet algorithm, from its promising rise to its broader acceptance to its shameful end as an ad firm’s puppy-saving gimmick. Though the strategy seems like a no-brainer (and it is), the big issue with whipping up code that trades on the president’s tweets is how infrequent they are. To make the tactic worthwhile, you’d have to be able to somehow predict Trump’s tweeting in advance. Or better yet, make him tweet.

Andrew Left seems attempting just that. On Tuesday the short-seller’s Citron Research published a brief on Motorola Solutions, arguing that the company’s profits rest on jacked-up contracts that cost the U.S. government about five times what European governments pay. Outrageous! “What would President Trump say if Lockheed was charging the US Air Force 5 Times what it Charged the United Kingdom for an F-35??” the report mused with Citron’s characteristic subtlety.

The Motorola thesis is only the latest chunk of red meat Citron has tossed in Trump’s direction. In December Citron called Express Scripts the “Philidor of the pharma industry,” recalling the scandal that brought down Left’s favorite target, Valeant Pharmaceuticals. In January it was aerospace company TransDigm, aka “the Valeant of the Aerospace industry.” In both cases Citron blared that Trump might step in and regulate, as he promised to do with the F-35 and drug prices.

This is the short-seller’s version of chumming, in which a fisher strews a trail of gore in order to draw big prey. Each of these shorts might have a perfectly valid reasoning behind it – and each short announcement did move the relevant stock – but the real catch is the Donald....MORE
As noted the day of the short NVDA tweet:
October 2014
Questions America Wants Answered: "Do Valuation Shorts Work Better Than Fraud Shorts?"
So good luck to Left.
NVDA NVIDIA Corporation daily Stock Chart