Lizhi's Stock Rips 30% After Citron Compares Company To Clubhouse And Roblox
Shares of China’s leading audio live-streaming company Lizhi Inc – ADR (NASDAQ:LIZI) traded higher by 30% on Tuesday after Citron Research editor Andrew Left said he likes the stock.
What Happened? In a pair of new tweets, Left called Lizhi a “cross-section of Clubhouse, Roblox and NOW dating” and set a $30 price target for the stock.
Left linked to this YouTube video demonstrating how the company’s “focus on games has expanded into dating.”
Why It’s Important: Left said Lizhi compares extremely favorably to competitor Yalla Group Ltd – ADR (NYSE:YALA) from a valuation perspective. Yala shares also traded higher by 16.2% on Tuesday.
See also: How to Buy Roblox IPO (RBLX) Stock
“On 2021 EV/Sales $LIZI trades at 1.4x sales vs 17.2X Yala. $LIZI should benefit from de-platforming of big tech in China. In other words LIZI is valued at $7 per MAU vs $YALA at $221,” Left wrote.
Left has taken a lot of heat from critics since taking a short position and setting a $20 price target for GameStop Corp. (NYSE:GME) in January, a move that angered Reddit’s WallStreetBets community.
Following the initial surge in GameStop and alleged threats against his family from GameStop traders, the longtime activist short-seller recently said he will no longer be issuing short reports.
Benzinga’s Take: Left always takes a lot of criticism for his missed short calls, and he has been wrong up to this point on GameStop. However, Citron’s annual shareholder letter recently revealed Left had a big year in 2020. Citron’s average exposure for the year was 20% long, and the fund generated a net return of 155% on the year.
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