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

On February 24, known short-selling firm Citron released a report stating that SanDisk’s market pricing is too high, similar to NVIDIA, but the two are different: NVIDIA has a moat, while SanDisk sells commoditized products. Western Digital had significantly reduced its holdings a few days earlier, trading below market price by 25%, indicating that seasoned investors foresee the memory cycle reaching its peak soon. Historical data shows that cyclical peaks in the memory market occurred in 2008, 2012, and 2018, and SanDisk is no exception. Over the past 30 years, Samsung has prioritized market share over profit margins, and this time, it is directly pushing high-end SSD products to SanDisk’s core customers, promising not to sell products with a gross profit margin below 50%. SanDisk’s current supply tightness is just a temporary capacity bottleneck, and this is merely a “shortage illusion” that could disappear at any time during an earnings call. Citron emphasizes that shorting SanDisk stock is a strategy to preemptively position for a cycle adjustment. When the memory market returns to normal, SanDisk’s stock price may have already fallen significantly.