Citron Research Believes That Wayfair Inc (W) Is An Accounting Fraud

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Citron Statement on Wayfair Earnings: Stock Should Trade Back to $45

While some Wayfair shorts cover, Citron loves the opportunity to short more here.


Beyond the company’s BS guidance, here’s a couple of key takeaways from the quarter. Citron believes the stock should trade right back to $45 (where it would still be overvalued):

  • The company’s Chief Technology Officer left to go back a startup; doesn’t sound like the future is bright and he gets to vest his options. (Maybe the manual controls scared him off?)
  • Customer Acquisition Costs up 39% YOY – this proves Wayfair is buying their revenue!
  • Revenue had first sequential DECLINE in 3 years
  • Operating losses growing a greater rate than revenue growth (34% vs 29%)
  • Accounts payable up 45% vs revenue up 29% (not paying bills is a great way to conserve cash)
  • Company missed on operating “profit” ($56.2mil) vs ($51.7 mil)
  • Second largest net loss and free cash flow burn in history of company – No Scale

For those of you who have not had the opportunity to review the OSTK investor deck- you will get a true look at the model and future of Wayfair.

Article by Citron Research

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