This is a very important case about a very slimy man I cannot stand. I don't know him but I cannot stand him.
Short-Seller Andrew Left’s Deleted Tweets Reappear in Fraud Case
Erik Larson
Fri, Aug 2, 2024, 7:00 AM EDT7 min read
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(Bloomberg) -- Embattled short seller Andrew Left deleted his research firm’s entire tweet history last year to fend off what he described at the time as “class-action attorneys and trolls” looking for dirt in his past stock commentary.
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Dozens of deleted tweets are now front and center in the US Justice Department’s indictment accusing Left of manipulating the market to benefit his own trading and lying to investigators.
Prosecutors say the tweets, on the platform now called X, were intended to dupe hundreds of thousands of people who followed Left’s Citron Research account into helping him move the market and reap millions.
“By using the Citron Twitter account to generate ‘catalysts’ — events with the ability to move stock prices — defendant Left profited from his advance knowledge that he was about to trigger such movements in the market,” the indictment says.
James Spertus, Left’s lawyer, says it’s “preposterous” that Left’s tweets could move large cap stocks and says they represented his legitimate views.
“Underlying every count in the indictment is the claim that the opinions tweeted were not what he believed, and that’s just not true,” Spertus said. “The misrepresentation here is from the Department of Justice, not Mr. Left.”
Spertus added that the target price for a stock has no relation to the price at which Left personally would close out a short position and assuming a connection is a mistake by the government.
The short seller pleaded not guilty earlier this week in Los Angeles, where he faces decades behind bars if convicted. The case, if it goes to trial, could shine a light on the way short sellers use social media and help draw a line between legitimate commentary and intentional manipulation.
Here are some of the tweets at the center in the indictment:
Roku ‘Uninvestible’
Early in the morning on Jan. 8, 2019, Left opened short positions in Roku Inc., the maker of TV streaming boxes and software, setting him up to profit if the stock were to fall, prosecutors say. At 9:41 a.m., Left posted on Citron’s Twitter account that Roku was “uninvestible,” according to the indictment. Left soon deleted the tweet and, the US says, “falsely and misleadingly” posted this instead:
“To clarify, we are watching ROKU from the side.”
Left made at least $700,000 from his Roku trades that morning, prosecutors say.
Beyond ‘Stupid’
Left began building a short position in Beyond Meat Inc. in mid-May 2019, according to the indictment. Then, on May 17 at 1:50 p.m., Left ripped into the maker of plant-based meat substitutes on Citron’s Twitter account, as noted in the indictment, mocking the company and predicting it would suffer from a new competitor:
“$BYND has become Beyond Stupid. Most heavily traded retail stock on Robinhood, market cap now bigger than industry, and superior competitor coming to market soon. We expect $BYND to go back to $65 on earnings On retail exhaustion. [Look]”
The short seller quickly began closing his position in Beyond Meat in Citron’s trading account, according to prosecutors.
Within 12 minutes of posting the tweet, Left sold the $90 put options that expired the same day, the US says.
American ‘Upside Down’
Left opened short positions in American Airlines Group Inc. in his trading accounts around June 5, 2020, prosecutors say. He also purchased short-dated $19 and $20 put options that expired the same day, as the airline was trading at about $20, according to the indictment. At 11:54 a.m., Left allegedly took to Twitter to blast the airline’s balance sheet:
“$AAL Back to $10 Robinhood traders have 0 idea what they [sic] buying. Balance sheet is upside down. Unencumbered assets worth far less than current price. The reason why Buffett fully exited lower. They don’t teach finance in the Sherwood Forest.”
Left completely closed his pre-tweet trades in the airline by about 12:37 p.m., for a profit of at least $429,000, the US says.
Cannabis ‘Dark Side’
Left began building a short position in Cronos Group Inc. on Aug. 29, 2018, a few days after he wrote to a hedge fund portfolio manager that “we can make money in weed” and “we can DESTROY” Cronos, according to the indictment. On Aug. 30, 2018, at 10:07 a.m., Left used Citron’s Twitter account to post a link to a Citron short report and said:
“$CRON tgt price $3.5. Everything that is contaminated about the Cannabis space. ALL HYPE with possible securities fraud . . . .”
At the time of the tweet, Cronos was trading at about $11.50 a share. About an hour later, Left used Twitter again to promote his short position on the weed company and upcoming TV appearance, prosecutors say.
“Andrew Left from Citron on CNBC Fast Money 5:25pm ET to discuss why $CRON is the most overhyped of all the ‘pot stocks’ with a target price of $3.5[.]”
Left began closing his short position on Cronos about 24 minutes after posting the first tweet, according to the indictment. By the end of the day, Left had reduced his pre-tweet position in the company by about 61%, the US said. The next day, Left wrote to another person that his commentary was like taking “candy from a baby” because Cronos was popular with retail traders, the US said.
https://finance.yahoo.com/news/short-seller-andrew-left-deleted-110000470.html
