Saloni Sardana, 22 August 2020
Famed short-seller Andrew Left is aggressively shorting a “crazy stupid” Chinese stock that has gained more than 320% on the New York Stock exchange in 2020, as he believes it has exaggerated its earnings and will eventually be delisted. The activist short-seller and founder of Citron Capital, told Business Insider that he believes that the earnings of GSX Techedu are grossly inflated “anywhere between 50 to 80%.” GSX, which is an online education provider, has surged despite a number of claims by various short-sellers casting doubt on the company’s performance.
Left said: “The company is crazy stupid. If you believe their financials, then you believe that they’ve created probably the greatest company that’s ever been created since early stage Google. Like they’re growing 350% and they’re doing it profitably. It’s just impossible.” He said that despite the company’s explosive stock market growth, it is “not even spoken about in China,” even though it has a market capitalization of over $20 billion on the New York Stock Exchange.
Left likened the company’s performance to Tesla’s stock surge, but without actually seeing any “Teslas on the road.” The education provider went public on the New York Stock Exchange in June 2019. Shares were initially priced at $10.50. The stock is currently hovering around $90.
