GameStop shares might drop after a rollercoaster ride, but Citron Research, led by Andrew Left, is exiting its short position on the video game retailer. In a post on X, Citron Research said it was exiting its short position, saying the platform now has “enough runway” following its $4 billion cash infusion.
However, even as Citron Research and Left accept to take the loss, they seem to believe that even with billions, GameStop won’t last, and the leg up was just hype-induced.
Specifically, Citron Research acknowledged the market’s irrationality, citing Dogecoin’s huge mega valuation. At spot rates, CoinMarketCap data shows that Dogecoin is the most valuable meme coin, with a market cap of over $20 billion.
The researcher maintains a bearish outlook on GameStop, believing that its financials are deteriorating, a stance that justified its initial short position.
Even so, the potential for another retail investor-driven rally, as often seen in meme coin booms, has prompted Citron to cut its losses. In 2021, Citron Research was forced to cut losses when GameStop share prices soared.
However, news of Citron Research exiting their short positions on GameStop saw GME share prices drop. Subsequently, some of crypto’s top meme coins, including PEPE, FLOKI, and ROAR, fell in tandem.
CoinMarketCap data shows that most meme coins are down double digits in the past week of trading. Roaring Kitty (ROAR) is down 30% in the previous week, and still in red over the last day, according to Coingecko data.
Interestingly, the meme coin is plunging barely days after the highly-anticipated live stream by Keith Gill, also known as “Roaring Kitty,” failed to deliver any substantial news.
It remains to be seen whether meme coins will recover after their contraction. Some analysts believe the failure of the United States Securities and Exchange Commission (SEC) to take action against “Roaring Kitty” could catalyze demand, reviving a new altcoin season.
Therein, meme coins will be recharged, tracking higher and lifting their total market cap above the $60 billion mark. Due to the plunge, the total meme market cap has shaved over $8 billion.
Feature image from Canva, chart from TradingView
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