Cyberdyne Shares Sink After Short-Seller Citron Targets Firm

  • Andrew Left’s Citron sees robot-suit maker losing 86% of value
  • Left’s bearish analysis of Valeant preceded slump last year

Cyberdyne Inc., a Japanese maker of robot exoskeletons for patients with spinal difficulties, tumbled after short-seller Citron Research said the company’s stock is poised to plunge.

Shares fell as much as 11 percent in Tokyo after Andrew Left’s Citron said Cyberdyne is too expensive, citing declining growth in the company’s core assistive-limb product and valuations that exceed peers. The stock pared losses in the afternoon and closed Tuesday 6.8 percent lower. The report didn’t state whether Citron has bet against the stock. The report is malicious and contains factual inaccuracies, Cyberdyne Chief Financial Officer Shinji Uga said.

“Exercise extreme caution,” Citron wrote in the report dated Monday, which set a target price of 300 yen for the company’s shares. That’s down 86 percent from Monday’s close of 2,077 yen. “Time and competitors have eclipsed Cyberdyne; the company has yet to effectively commercialize any product."

The report cites a June presentation by Oasis Management’s Seth Fischer at a hedge fund conference in Hong Kong, where Fischer said Cyberdyne’s shares would have to drop 95 percent before he would consider investing. Citron’s broadside comes after Glaucus Research Group said last month it was shorting trading house Itochu Corp. in its first bearish bet on a Japanese company.

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“Citron’s report doesn’t mention this, but the core of Cyberdyne’s sales come from a nursing-care robot that’s attached to the waist,” said Hiroyasu Nishikawa, an analyst at Iwai Cosmo Securities Co. in Tokyo, who says he continues to rate the stock a buy. “The company will start operation at a new factory in Fukushima at the end of this month, and we see the effect of this production turning the company profitable this fiscal year or next.”

Cyberdyne is down 26 percent since the stock rallied to a record in May. Of five analysts tracked by Bloomberg who’ve updated their ratings this year, four are advising investors to buy the shares.

U.S.-based short seller Left came to prominence for analysis of Valeant Pharmaceuticals International Inc. last year, which questioned whether the Canadian drugmaker was “the next Enron” because of links to a specialty pharmacy. In July, Left said Facebook Inc. could lose almost a third of its value.

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