Citron Research activist short seller and newsletter author Andrew Left tweeted the firm is taking profits on its previous short position in NVIDIA Corporation NVDA 0.58% and shifting the position to a short on Mobileye NV MBLY 1.49%.
Left made a nice profit off of his NVIDIA short, which he disclosed in December when shares were trading at $119. Today, NVIDIA is trading at around $100. Left says he now has a $35 short-term price target for Mobileye, which is down roughly 3 percent on Friday to $46.70.
“At the prices comparing $NVDA to $MBLY, one can easily understand why Mobileye is now ripe as a short,” Left wrote in his new report.
He points out that Mobileye’s stock currently trades at a significant premium to NVIDIA in terms of P/EBITDA. In addition, NVIDIA has a more robust research budget and a healthier free cash flow situation as well.
Finally, Left notes that Mobileye insiders have been dumping the stock since the beginning of 2016. Citron reports insider sales per employee of $488,000 for Mobileye compared to only $13,000 for NVIDIA in that time.
According to shortsqueeze.com, Left isn’t the only one skeptical of Mobileye. The stock currently has a short percent of float of 16.1 percent with 10.0 days to cover.
In the past year, NVIDIA has been…
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