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

Bloomberg

Andrew Left

• Roku shares have soared more than 200% since their initial public offering in September to more than $45 apiece.
• Short seller Andrew Left's Citron Research says the stock is a "total joke" and that it will slide back below $40.

Shares of Roku are trading down 2.26% at $45.47 apiece on Tuesday afternoon following some downbeat commentary from short seller Andrew Left's Citron Research.

"Time to pop some real bubbles," the firm's Twitter account said. "$ROKU, total joke."

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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 $50 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 $28 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 $40.

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

Markets Insider