JAKARTA - Citron Research, an analysis firm known for its bearish predictions, has made unexpected moves by announcing the termination of predictions of a decline for GameStop (GME) stocks. This decision marks significant changes in their views on video game retailers that have become the center of capital market attention.
Citron Research, known for its aggressive short position, seems to have reconsidered their strategy after witnessing a wave of investor enthusiasm for GameStop. In a statement released via social media, Citron stated, "We no longer expect a decline in GMEs," a confession that has shocked many market observers.
The firm acknowledges that GameStop reserves that reach 4 billion US Dollars (approximately IDR 65 trillion) will provide convenience for shareholders in the short term. However, Citron also expressed their disappointment with what they considered to be irrational market behavior, similar to the Dogecoin (DOGE) phenomenon, a crypto asset that reached a market cap of 20 billion US Dollars (approximately IDR 325 trillion), according to them, without a solid basis.
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GameStop Volatility
Citron's announcement comes amid a period of high volatility for GME stocks. Quoted from CoinGape, Michael Pachter, an analyst at Wedbush, has provided an underperforming rating for GMEs with a 12-month target price of 11 US Dollars (approximately IDR 178,915), which suggests a potential drop of more than 60% of the current price. Currently, GMEs are trading at 29.83 US Dollars (approximately IDR 485,184), down 2% in pre-market trading.
Citron also acknowledged the potential for share dilution due to the issuance of new shares by GameStop, and stated that they would take a stand as observers. They closed their announcement with satire against Roaring Kitty or Keith Gill, whose livestream in 2021 is considered a catalyst for the soaring price of GameStop shares.
Recent reports from CoinGape suggest that GameStop price action is moving towards the end of the triangular pattern, with a risk of 50% that such patterns can break up or down. However, taking into account other factors, the chances may be leaning towards one particular direction. One of the main reasons is that GMEs still show an increase despite having experienced a recent sharp decline.
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