Citron's Andrew Left Talks Inovio, Fluidigm And His 'Biggest Mistake As A Short Seller'

Citron Research founder and activist short seller Andrew Left discussed his latest ideas during an appearance on Benzinga’s PreMarket Prep show Tuesday morning.

Left has gained notoriety over the years for successfully betting against Bausch Health Companies Inc BHC (formerly Valeant Pharmaceuticals) and a number of fraudulent Chinese stocks, but has also come out positive on a number of stocks he believes are true winners.

Short Ideas: One of Left’s current short positions is COVID-19 vaccine play Inovio Pharmaceuticals Inc INO, which Left calls “Pinocchio Pharmaceuticals.”

“They were pretty much told by the FDA they can not start Phase 2, so they’re stuck in Phase 1. Now we’re 30 years [with] no product,” Left said.

“I don’t know why it’s worth anything more than cash...They said they developed a vaccine in three hours...yet it’s going to take them a month to answer the FDA about this vaccine. Short-term it should definitely trade at $6 or $7.”

Left also recently compared Chinese education stock GSX Techedu Inc GSX to fraud Luckin Coffee Inc - ADR LKNCY.

“If it’s not a fraud, they’re a better company than Snowflake than Google, than Facebook ever was. They said they’re growing at 370% profitably. So it’s either the greatest company that ever existed in the history of the world, or it’s a fraud,” Left said.

Left has called Plug Power Inc PLUG the anti-Tesla Inc TSLA.

“Plug Power has been expensive for a while, and it remains expensive. But now people are on the hydrogen [trend], they’re just loving on it, so it is what it is....I would not own the stock at all. I don’t know about shorting. I’m not short the stock right now,” Left said.

Left is also skeptical of buying movie theater stocks like AMC Entertainment Holdings Inc AMC and Cinemark Holdings, Inc. CNK, but would be cautious shorting.

“The problem with the movie theaters is obviously the business model just seems dead, right? But tomorrow if we have a working vaccine do I feel like standing in the way of an 80% move against me?” he said.

Long Ideas: While Left has gotten plenty of publicity for his activist short selling, he also makes plenty of bullish bets as well. Left recently said he was long Fluidigm Corporation FLDM.

“The only way we’re going to get out of what we’re in right now is massive testing, and I still don’t know why it’s tough to get tests. Saliva-based testing seems to be the answer. They have the most advanced proprietary system for mass-scale saliva-based testing,” Left said.

Left has predicted Restoration Hardware Holdings RH would soon hit the $500 range.

“They hit every trend out there--the de-urbanization trend, the stay-at-home trend. They’re one of the few companies out there without any real competition. If stores do open up again, they own the best real estate in the country...I don’t see what stops them,” Left said.

Biggest Mistake: Left is bullish on fitness equipment stock Nautilus, Inc. NLS because he likes the home fitness trend, and said his biggest mistake was underestimating that trend by shorting Peloton Interactive Inc PTON.

“My biggest mistake as a short seller is shorting a good product on valuation. I think the valuation on Peloton is stupid, ridiculous, nonsensical,” Left said.

He said the valuations of Shopify Inc SHOP and Tesla are similarly ridiculous, but cautioned that valuation hasn't mattered recently.

“Historically if you want to make money in this market, the past 10 years, if you find a product and you like the product, you buy the stock. You do not worry about the price of the stock.”

Watch to the full interview with Andrew Left in the clip below, or listen to the podcast here

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET Benzinga's YouTube channel, and the podcast is on Spotify, iTunes, Google Play, Soundcloud, Stitcher and Tunein.