Mobileye: Citron Research's Next Issue Primed For Huge Decline

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Mobileye NV MBLY shares were trading lower by $2.80 (5.7 percent) at $49.81 in Wednesday's session. The firm is being targeted by well-known short-selling firm Citron Research.

Earlier Wednesday in a tweet, the firm "sets short term target on $MBLY at $25....just follow the money. Citron exposes the real Mobileye. Worse than $amba."

The issue, which had already been in decline after a higher open, swooned to $48.97 before staging a rebound into the $50 handle and retreating once again.

Mobileye had been a stellar performer this year, rallying from year-end close of $49.56 to $64.48 earlier this month before being dragged down with the rest of the market. Its only reference point beneath today's low and that would be is Flash Crash low of $41.80.

It should be noted Citron Research has made some exceptional calls in the past. The most recent being Ambarella AMBA, the component maker for GoPro Inc. GPRO, when it was trading near the $120 level.

The firm revealed in a tweet on September 3 that it was covering its short position in Ambarella. On that day, shares fell from its previous day close of $81.98 to $73.15 one day after issuing weak guidance for Q3.