Citron Research took to Twitter today with a decisive message: “ROKU stock is uninvestable now”. Immediately after, the stock plunged nearly 10%. This comes after a tremendous 25% gain just 24 hours prior, when newly released strong Q4 streaming numbers boosted the stock drastically.
Now that Apple is expanding the capabilities and reach of the iTunes Store alongside previously exclusive features such as AirPlay 2 and Siri support, investors are seeing Roku at a dead-end financially — even citing Roku CEO Anthony Wood’s recent self-stock-selling-spree.
Here is Citron Research’s original tweet:
We initially went long $ROKU at $35. However, have to recognize when the story has changed. APPLE TEAMING UP WITH SAMSUNG., ROKU CEO selling last week, and short interest at lows. Risk/reward no longer there. Expect big retracement. ROKU stock is uninvestable now
— Citron Research (@CitronResearch) January 8, 2019
Roku has been a successful yet tumultuous company. Earlier this year, CEO Wood defended the company criticism, telling The Verge:
We don’t really make money… we certainly don’t make enough money to support our engineering organization and our operations and the cost of money to run the Roku service… That’s not paid for by the hardware. That’s paid for by our ad and content business.
Consumers are shifting to streaming. And as they shift to streaming, advertisers are following them. Building out a big, next-generation TV ad platform is an important part of Roku business
Prior to that, the company plunged at the stock market when Best Buy and Amazon announced a partnership to sell smart TVs.
Do you own any Roku stock? How do you feel the future television streaming market will look now that Apple is expanding to multiple manufactures? Let us know in the comments below!