CITRON RESEARCH: 'Time to pop some real bubbles. $ROKU, total joke'

BloombergAndrew Left
  • Roku shares have soared more than 200% since their initial public offering in September to more than $US45 apiece.
  • Short seller Andrew Left’s Citron Research says the stock is a “total joke” and that it will slide back below $US40.

Shares of Roku slumped as much as 2.5% on Tuesday afternoon following some downbeat commentary from short seller Andrew Left’s Citron Research. They have recouped those losses and are now higher by 2.45% at $US47.66 apiece.

“Time to pop some real bubbles,” the firm’s Twitter account said. “$ROKU, total joke.”

Roku shares have rallied more than 200% since their initial public offering in September. They climbed more than 25% combined on Monday and early Tuesday after Needham analyst Laura Martin compared the service to Netflix and raised her price target to $US50 a share.

“Like Netflix, we view Roku as a pure-play on over-the-top (OTT) TV-viewing growth, but Roku has no content risk,” Martin wrote. “Recent announcements and press reports that Disney, Google, Amazon, etc. are launching new Over-The-Top services helps Roku but hurts Netflix.”

But Citron doesn’t agree, saying that Martin’s target was “irresponsible” and that its price should be much lower unless it “finds a way to stream a BTC.” The firm says RBC Capital Markets Analyst Mark Mahaney’s $US28 price target is more in line with their thinking.

Left will be on CNBC’s Halftime Report on Wednesday to explain why shares will slide back below $US40.

“This is not just a bubble, this is just plain ridiculous,”Citron tweeted.

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