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Citron: Mobileye Worth Just $11 Now And 'Goldman Sachs Knows It'


Shares of Mobileye NV (NYSE: MBLY) were trading higher by nearly 2 percent Wednesday afternoon, despite the company being a focus of another research piece by notable short-seller Citron Research.

Citron stated in its latest report on Wednesday that things "have gone from bad to worse" and the stock has "become the most outrageously overpriced, overhyped semiconductor stock ever."

Related Link: Citron Still Thinks Mobileye Is Way Overvalued

Specifically, Citron cited four points to support its thesis: 1) Mobileye has "tacticly" admitted its strategy to dominate the autonomous driving market has been "inadequate all along," 2) there exists "clear evidence" that the competitive landscape is "rapidly succumbing to commoditization, 3) insider selling has reached a "level that has gone from abusive to obscene," and 4) Wall Street analysts have lowered their forecasts as the company admits to no visibility in its business model after 2019.

Citron continued that Mobileye's management is acting like a "college kid at a bar at 2:00 AM: They say whatever they have to do to get into bed, regardless of the truth."

Meanwhile, the stock's valuation is more than 1000 percent higher than it was in April 2012. At that time, the company projected its 2016 revenue to be $726 million and fast forward to 2016, Mobileye is now projecting its current year revenue to be slightly above $350 million - less than half of their revenue model at that time.

'Goldman Sachs Knows'

Citron's advice for investors? Follow the money. And who best to follow then Goldman Sachs?

When Mobileye filed for its initial public offering, Goldman Sachs owned 30.4 million shares of Mobileye, representing approximately 15 percent of all outstanding shares. This is notable as Goldman Sach's showed that it owns just 1.2 million shares in its most recent 13G filing.

"Goldman Sachs knows it [the short thesis against Mobileye's stock]... because at the end of the day... Money Talks and Bullshit Walks," Citron said.

Bottom line, "Mobileye Can Jump ... But it Will Never Fly. Management knows it, Goldman Sachs knows it, Citron knows it – And now you know it."


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Posted-In: Autonomous Driving Citron Mobileye Citron ResearchAnalyst Color News Short Sellers Short Ideas Trading Ideas

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