Citron Calls Roku 'Uninvestable' After Big Gain

Roku Inc ROKU cooled down a bit Tuesday, dropping 5 percent after gaining more than 20 percent in Monday’s session. The huge move came after Roku announced two impressive growth fourth-quarter growth metrics, but notable short seller Citron’s Andrew Left said the risk-reward balance is no longer bullish for Roku.

Encouraging Metrics

Roku stock skyrocketed Monday when the company announced that it reached 27 million accounts in Q4, up 40 percent from a year ago. Roku also said it had a total of 7.3 billion streaming hours in Q4, up 68 percent year-over-year.

After Monday’s gain, Roku shares were up more than 35 percent in the first week of 2019, and Left took to Twitter Tuesday to throw some cold water on the red-hot stock. Left said he was bullish on the stock at $35, but the Roku story has now changed for the worse.

Left: 'Uninvestable'

Left specifically mentioned a new streaming deal between Apple, Inc. AAPL and Samsung Electronics Co Ltd SSNLF. On Sunday, Apple and Samsung announced a new partnership that will allow Samsung users to access Apple services such as TV and iTunes on Samsung devices, such as smart TVs.

“APPLE TEAMING UP WITH SAMSUNG., ROKU CEO selling last week, and short interest at lows. Risk/reward no longer there. Expect big retracement. ROKU stock is uninvestable now,” Left tweeted.

The original tweet has since been deleted, but Citron posted a new tweet at 1:21 p.m. ET.

"To clarify, we are watching $ROKU from the side," the tweet said. "After successfully shorting ROKU as it traded as high as $50 in late 2017, we reversed our position at $35 last year. With Apple teaming up with Sams, LG, and Vizio investors must consider the risk to the bigger story."

Following Tuesday’s sell-off, Roku stock is now down 14.6 percent overall in the past six months.

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Photo courtesy of Roku.