Citron Research Bought A Lemon

Carson Block and Andrew Left are in many respects cut from the same cloth: Hard-nosed short-sellers ready and eager to turn rumor and innuendo into detailed research that shows that this company or that is a worthless scam run by some Chaucerian frauds in which much money is to be made in the shorting thereof.

And so it was that an unsolicited 89-page report accusing a Chinese coffee chain of accounting issues and other malfeasance crossed Block’s desk and became a tweet alleging the same. This did not sit well with Left, who in addition to having built his own career out of company-destroying tweets has also been known to go long every now and again, for instance, on Luckin Coffee. This fine purveyor of caffeine, Left insisted, was “on fire,” a formal rating he assigned based on his own, non-anonymously sourced research.

Alas, Left should have known better than to go all in against Block, who has kind of a nose for Chinese frauds.

Luckin Coffee Inc. disclosed Thursday that its board is investigating reports that senior executives and employees fabricated transactions…. Luckin shares collapsed as much as 81%, the most intraday since its IPO last May….

“There was a piece of research circulated by an anonymous third party and Muddy Waters ran with it, more power to him,” Left wrote Thursday in an email to Bloomberg News. “I saw the shareholders of the company and did some research and questioned the accuracy of the anonymous info. It turned out to be correct. Kudos to those who stuck with it.”

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