Citron Research no longer has a short position in retail traders' favorite GameStop, the short seller said on X.com on Wednesday, days after taking a bearish position in the company.
Andrew Left, Citron Research's founder, had said last week he was again betting against GameStop, although his position was "significantly lower" from 2021 when he was forced to close his position after retail traders banded together in online forums and drove an eye popping rally in the stock, squeezing hedge funds.
Left told Reuters he would short GameStop again if the stock reached a $45-$50 level. He said Citron closed the short position at a profit, although he did not disclose the size.
GameStop had about $1 billion in cash as of May 4.
The company said it had raised $2.14 billion in gross proceeds from the stock sale it announced last week, after raising $933.4 million in May, as it capitalized on the meme stocks rally sparked by the return of stock influencer "Roaring Kitty" Keith Gill following a three-year hiatus.
"It's not because we believe in a turnaround for the company fundamentals will ever happen, but with $4 billion in the bank, they have enough runway to appease their cult like shareholders," Citron said in the tweet.
The struggling videogame retailer said it intends to use the capital for general corporate purposes.
The company's stock rose 5.3% to $32.1 on Wednesday. The stock has declined 34% in value since Gill's livestream on Friday failed to spark investor enthusiasm, but it has still gained 70% from mid-May when the key figure that sparked the Reddit frenzy resurfaced on X.com.
GameStop has not earned a profit since the fiscal year ended February 2018, as business at its brick-and-mortar stores were sapped by the shift to online gaming.
"Whether they are able to use (the capital) to turn this into a profitable business model, (we will) only know in the future," said Art Hogan, chief market strategist at B. Riley Financial.