Short seller Andrew Left can’t stay away from GameStop.
His bet against the videogame retailer three years ago unleashed fury from GameStop devotees. They ordered dozens of pizzas to his house after midnight, hacked into his social-media accounts, shared his personal information, and texted threats and profanities to him and his children. As amateur traders banded together to push the stock higher, he closed out his position at a 100% loss and vowed to stop publishing short-selling reports.
Now, the founder of Citron Research is shorting GameStop once again. Keith Gill, who helped direct the world’s attention to GameStop a few years ago, re-emerged on X in May, sparking a trading frenzy in the stock. Left opened a new short position, covered it and made some money, he said. After Gill on Sunday shared a screenshot showing he owned five million shares of the company, Left shorted GameStop once more.
Left believes the current GameStop craze is in many ways more confounding than the previous one. GameStop is much more expensive than it was when it began soaring three years ago. At least back then, he said, there was hope the business could turn around. He doesn’t see an investment thesis now and, like many, has questions about how Gill built up such a big position in the stock and what his return might mean for GameStop.
“It makes no sense,” Left said in an interview. “Everyone knows the stock’s extremely overvalued.”
This time, Left hasn’t made as big a bearish bet. He wouldn’t disclose the size of his current short position but said it comprises a small part of his overall portfolio.
He learned his lesson in 2021 about making large bets against meme stocks.
“It’s a cult stock. You don’t do that on cult stocks,” Left said. “Fool me once, shame on you. Fool me twice, shame on me.”
Left made a name for himself as a brash, foul-mouthed investor publishing reports on companies he claimed were overvalued or engaged in fraud. Short sellers borrow shares and sell them, betting the stock will fall so they can buy them back at a lower price and pocket the difference. But if a stock rises, short sellers lose money when they repurchase the stock at a higher price.
A former high-school debater who grew up in a Miami suburb, Left began investing with money borrowed from a friend in 1995. He started a blog called stocklemon.com in 2001 and self-published scathing reports. When he lost much of his wealth in a divorce in 2007, he rebranded his blog as Citron Research.
He sounded the alarm on China Evergrande in 2012 and was banned from trading securities in Hong Kong for five years—but was proved right when the Chinese property developer collapsed years later. His 2015 report accusing Valeant Pharmaceuticals of fraudulent practices sank the stock. Companies have sued him for alleged defamation, and the Justice Department has investigated him in a wide-ranging examination of short sellers.
All of the criticism that he was used to fielding as a short seller didn’t compare to the ire he drew in 2021 for his bet against GameStop. On online forums such as Reddit’s WallStreetBets, traders bragged about squeezing the shorts, beating up the big investors who control the market. Ironically, short sellers are a relatively fringe group of investors who generally eschew Wall Street.
“When we started Citron, it was to be against the establishment,” Left said in a 2021 YouTube video. “We’ve actually become the establishment.”
Many short sellers have pulled back in recent years, with stocks climbing to new highs and the potential for meme-stock traders to defy financial logic. Jim Chanos, the famed short seller who took on Enron and Tesla, last year shut down his hedge funds, telling The Wall Street Journal, “The marketplace for what I do has changed.”
Short interest in GameStop, or the portion of available shares sold short, picked up this year, but remains a fraction of 2021 highs, according to FactSet. With GameStop shares up around 50% this year, short sellers are sitting on roughly $500 million in losses on paper in 2024, according to S3 Partners analysis.
The excitement from Gill’s return has already worn off a bit. Shares closed down 5.4% on Tuesday after a 21% advance Monday.
Left believes the GameStop trading frenzy shows that the U.S. is a “nation of gamblers,” but he doesn’t think the market is broken.
“It’s just one stock. It’s an outlier,” he said. “At the end of the day, you have to respect the market.”