Left and his firm, Citron Capital LLC, have long been a thorn in Zillow’s side, facing charges from the U.S. Department of Justice and the Securities and Exchange Commission that they profited by taking positions in companies that did the opposite of what they told investors they were doing. Profit.
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Stock analyst and trader Andrew Left has been indicted by the Justice Department for allegedly manipulating the stock market. Zai Li’s report raised questions about the business practices of these companies.
Left, a frequent commentator on business shows on CNBC, Fox Business Channel and Bloomberg Television, has been accused of publicly stating that companies he researched were undervalued or overvalued and then taking positions in those companies that were inconsistent with his recommended investments. The opposite of that.
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The U.S. Department of Justice filed a 19-count indictment in U.S. District Court in Los Angeles on Thursday, alleging that Left used his social media followers and public platform to earn at least $1,600 from March 2018 to October 2023 by fraudulently manipulating the stock market. Ten thousand U.S. dollars.
The U.S. Securities and Exchange Commission also announced charges on Friday against Left and his company, Citron Capital LLC, alleging in a complaint that Left engaged in a multi-year “bait and switch” scheme that defrauded his followers of $20 million.
Citron Research did not immediately respond to Inman’s request for comment. Citron boasts on its website that more than 50 companies it questioned in reports from 2001 to 2008 were later scrutinized by regulators.
Citron initially rose to prominence by shorting companies it claimed had engaged in unprofitable business practices or outright fraud. Short sellers make money by borrowing and selling shares of companies they believe are overvalued, then buying back the shares at a lower cost.
Citron predicted in a 2013 report that Zillow’s stock price would fall to $30 a share due to an “unattractive customer base” and the company’s alleged “unstable position in the real estate industry.”
Zillow said of the report at the time: “The Citron report was written by a company known for accepting compensation from short sellers who stand to benefit financially from the decline in Zillow’s stock price. The report is fundamentally inaccurate and incomplete.” “
In 2019, Citron Research changed its stance, expressed its optimism about Zillow, and promoted the return of co-founder Rich Barton as CEO.
When news of Left’s indictment broke, Zillow co-founder and former CEO Spencer Rascoff posted on social media platform X, “This has been a long time coming.”
In recent years, Citron has expanded beyond just picking companies it believes are overvalued and good targets to short, and has also begun touting companies it believes are promising for investors to take long positions.
The U.S. Department of Justice’s indictment described Citron Research as an “online moniker” created by Left as a vehicle for disseminating investment advice. In 2018, Left founded Citron Capital LP, a hedge fund incorporated in Delaware and registered as an investment adviser in California.
The SEC alleges that Left used the Citron Research website and related social media platforms on at least 26 occasions to “publicly recommend taking long or short positions in 23 companies and to hold positions consistent with his own and Citron Capital’s positions.”
Once the recommendations were issued and the company’s stock price rose or fell, “Left and Citron Capital quickly reversed their positions to take advantage of the stock price movements,” the SEC said. “So Left bought back the stock immediately after telling his readers to sell, and he sold the stock immediately after telling his readers to buy.”
The SEC said Left, 54, formerly lived in Beverly Hills but now lives in Boca Raton, Florida.
“Andrew Left took advantage of his readers. He built their trust and induced them to trade under false pretenses so that he could quickly reverse course after the report and profit from the price movement,” SEC Los Angeles District Office Director Kate Zoladz said in a statement. “We uncovered these alleged bait-and-switch tactics that enabled Left and his companies to obtain $20 million in ill-gotten profits, and we intend to hold Left and his companies accountable for their actions.”
Andrew Left, Real Estate Connects San Francisco
When Left appeared on stage at Inman Real Estate Connect in San Francisco in 2018, he was introduced as a “stock market and valuation skeptic.”
In discussions with then-Warburg Realty President Clelia Peters and the agency’s CEO Mauricio Umansky, Left was asked about the market capitalization of public companies seeking a larger share of the real estate business.
“I mean, it’s amazing that Netflix is worth more than Disney, right?” Zuo said. “Obviously, if you look at Tesla or General Motors or Ford, this is prevalent [industries] – This is how Wall Street pays a lot for disruption.
“I think everyone knows Tesla has been disruptive,” Left said. “In fact, in the automotive industry, everyone is going to be making electric cars in the next 10 years. I think the real estate business is still up in the air. Is it Red Fin? Is it Compass? Is it Zillo? Who is going to be the ultimate disruptor? So, In the meantime, let’s give them a big valuation.
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