Citron Research spent years attacking Zillow before becoming bullish on the real estate tech company in 2019.

As last week’s trading frenzy over the stock of video game retailer GameStop sent share price soaring, short-sellers — or institutions that had essentially placed bets against the company’s stock price — suffered.

Citron Research, a famous short seller that spent years with Zillow in its crosshairs, was forced to close out its short position in GameStop — essentially buy back the shares it borrowed and sold with the shares at a much higher value than when it initially borrowed the shares — according to CNBC, and in turn, has decided to stop publishing short reports altogether.

“20 years ago I started Citron with the intention of protecting the individual against Wall Street, against the frauds and the stock promotions that were all over,” Citron Research founder Andrew Left said, adding that he was proud of the work his company had done, especially in uncovering more fraud than any non-governmental agency.

“Now after 20 years, we noticed something,” Left added in a video posted to Twitter. “While we started Citron to be against the establishment, we’ve actually become the establishment.”

Moving forward, Citron Research will focus on its long-term recommendations for investors, which Left said was up 121 percent last year on average.

Citron Research has famously targeted Zillow Group over the years, as far back as 2012. In a 2013 short report, Citron predicted Zillow’s stock would fall to $30 per share due to a “lack of appeal among their customer base” and their precarious position in the real estate industry.

When Zillow acquired Trulia, Citron Research accused the two entities of having a “rock-bottom” deal with Realogy in place that would prohibit other brokerages from advertising on the platform.

In 2015, as Zillow stock continued to soar, the company split its stock three ways. In 2021, the company is trading at an all-time high and opened trading for the week near $140.

The company’s performance even led Citron Research to become bullish on Zillow in 2019, as Rich Barton re-took the helm of the company in 2019.

The announcement that Citron Research would no longer be publishing short reports was met with a celebratory tone by Spencer Rascoff, the co-founder and former longtime CEO of Zillow.

In the days leading up to the decision, Rascoff criticized the entire premise of short-selling companies in a Twitter thread.

“When a short-seller like @CitronResearch puts out a ‘report,’ it is manipulating a stock for its own gain,” Rascoff said. “It is not a research shop, it is a hedge fund. And it’s not a ‘research report,’ it’s just talking your own book.”

Rascoff accused Left and Citron Research of trying to “manipulate” Zillow’s stock price with his short attack on the company and on Rascoff personally from 2012-2015.

“Since then, Zillow has gained about $25 billion of market cap,” Rascoff said. “How’s that short working out?”

Email Patrick Kearns

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