Carson Block of Muddy Waters Research Calls GSX Total Fraud
Carson Block of Muddy Waters Research has reiterated his narrative on GSX Techedu Inc. (“GSX”) as a near total fraud and says he is still short in a recent Bloomberg TV interview.
“We got squeezed way up by what was really a consortium of funds who I think engineered this. The game’s been different since Covid. We adapted last year and I think we’ll adapt going forward.” – Carson Block on Bloomberg TV
Muddy Waters has been short GSX since their initial research initiation in May 2020 GSX is an education tech company that provides K through 12 schools tutoring in China.
Over the past two weeks GSX has rallied from $50 per share to a high of $142 per share – likely from the increase in high short interest (currently 77%) stocks from the WallStreetBets crew despite the stock getting multiple downgrade from sell side coverage.
On other high interest short stocks (GameStop, AMC Entertainment and Bed Bath & Beyond) Block says, “They are going to come down,” Block said. “I hope they sell shares before they come down. That gives them more of a lease on life. They are coming down at some point. I don’t know when, but they will come down.”
Despite the “attack on short sellers” Block seems to be confident in his strategy as he continues to short sell overvalued or fraudulent companies. As noted earlier this week, Andrew Left of Citron Research, a long-time short seller, said his firm will no longer be shorting stocks.