Famous short-selling firm Citron: Currently shorting SanDisk, the current storage chip market boom is a "supply illusion"

BlockBeats News, on February 24, well-known short-selling firm Citron Research released a report stating that SanDisk is overpriced in the market, similar to Nvidia, but with a key difference: Nvidia has a moat, while SanDisk sells commoditized products. Western Digital significantly reduced its holdings a few days ago, selling at 25% below market price, indicating that experienced investors foresee the memory cycle approaching its peak. Historical data shows that cyclical peaks in the memory market occurred in 2008, 2012, and 2018, and SanDisk is unlikely to be an exception.

For the past 30 years, Samsung has prioritized market share over profit margins, and this time it has directly pushed high-end SSD products to SanDisk's core customers, promising not to sell products with less than 50% gross margin. SanDisk's current supply shortage is only a temporary capacity bottleneck, which is merely a "shortage illusion" that could disappear at any time during an earnings call.

Citron Research emphasized that shorting SanDisk stock is a strategy to prepare in advance for cyclical adjustments. When the memory market returns to normal, SanDisk's stock price may have already dropped significantly.