NEW YORK, Oct 21 (Reuters) - Andrew Left’s Citron Research is largely a one-man investment research operation that has shaken financial markets in both the United States and China from his home office in Beverly Hills, California.
His missive on Wednesday on Valeant Pharmaceuticals International Inc caused the already-reeling stock to plunge and fed further doubts about the drug company’s operations, beginning with its pricing practices.
“It’s down 18 percent now. It’s got a lot more to go. The work speaks for itself,” Left told Reuters shortly after his report was emailed to subscribers, for which he does not charge.
“I have a team around me, but I keep everything secret,” Left said, adding: “I always want the message to be the important thing, not the messenger. Notice they say it is Citron, not Andrew Left. There is no ego in this game. Read what I write. I don’t talk about my operation.”
Valeant’s U.S. shares were last down 39.5 percent at $88.77 on record trading volume. Left wrote two other reports on Valeant this year, on Sept. 28 and Oct. 2.
He came to prominence when he and several others, most notably Carson Block of Muddy Waters Capital, targeted U.S.-listed shares of Chinese companies; a number of those companies eventually either went bankrupt or were de-listed.
Left started out as a broke college graduate who answered an ad for a boiler-room commodities brokerage, Universal Commodity Corp in 1993, touting an opportunity to earn $100,000 a year.
He quit nine months later in March 1994. The Florida firm was cited in December 1995 by the National Futures Association (NFA) for failure to supervise employees engaged in fraudulent practices. Left was sanctioned by the NFA as part of a wider probe into the firm. The firm was closed down in December 2008 after another infraction, the NFA says.
“I didn’t know what a boiler room was when I was 23,” he said in a 2011 interview with Reuters.
On Sept. 28, the day of Left’s first report on Valeant, shares fell 16 percent, but that was the same day 18 Democratic members of a U.S. House of Representatives committee urged their chairman to subpoena the company, seeking documents related to price increases.
The shares gained on Oct. 2, when the next Citron report was published.
Like many short-sellers who tout their research publicly, Left has a mixed record over 14 years of publishing online.
In November 2014, he notably called wearable camera maker GoPro as having the “ most optimistic conceivable valuation” that it possibly could command. Shares were trading around $82 a share at that time - they now trade at $29 a share. On the flip side, he said he was short Tesla Motors in September of 2013; the stock is up 14 percent since then.
Among his recent calls, on Oct. 12 Left published a report critical of 2U Inc, saying the education company was 67 percent overvalued. The stock had already been falling, but shares fell nearly 18 percent on the day of his report and have not since recovered.
Left has not always been negative on a company. In March, he cautioned against piling into the selloff of Lumber Liquidators after it was accused of selling unsafe flooring. While he did not disclose a position, he said he was caught too many times thinking a company was going out of business. Shares, however, continued to sink.
A long position he disclosed in Sodastream in February 2014 has also been a loser, as the stock has slipped in that time. His bet on Blackberry from January 2014 was a winner for several months, but the stock has underperformed since the summer.
Reporting By Daniel Bases and David Gaffen; Editing by Nick Zieminski