Kemo
09-09-2015, 07:41 PM
Driver-assistance systems maker Mobileye NV's shares fell after short-seller Citron Research said there was nothing in the company's "financials, business performance or realistic future prospects" to justify its $12 billion market value.
Shares of Israel-based Mobileye, which makes camera-based systems that help drivers avoid collisions, fell as much as 7 percent to $48.98 on Wednesday.
Citron set a short-term price target of $25 on the stock, its initial public offering price, and a lower long-term target of $10. The median price target of 13 analysts is $71, according to Thomson Reuters data.
"Investing in this company is a 'Hail-Mary bet' on a blue-sky future that just does not exist," Citron said in a statement.
The short-seller said Mobileye did not own patents on advanced driver assistance systems that could discourage competition nor did it have long-term supply commitments.
"It is Citron's opinion that much of the run in Mobileye's stock is due to the hype surrounding (autonomously) self-driving cars," it said.
Mobileye could not be immediately reached for comment.
Short-sellers make money when the stock price of a company drops. They sell borrowed shares in the hope of buying them back at a lower price, returning them to the lender and pocketing the difference.
Mobileye has said it expects to benefit from the growing trend of semi-autonomous and autonomous cars, developed by companies such as Tesla Motors Inc and Google Inc.
Mobileye's technology detects other vehicles and objects using only a camera and software based on algorithms, unlike other systems that use complex radar-based sensors.
The stock's intrinsic value is $10.97, according to Thomson Reuters StarMine's model, which calculates the value by taking into account analysts' earnings per share growth forecasts.
Shares of Israel-based Mobileye, which makes camera-based systems that help drivers avoid collisions, fell as much as 7 percent to $48.98 on Wednesday.
Citron set a short-term price target of $25 on the stock, its initial public offering price, and a lower long-term target of $10. The median price target of 13 analysts is $71, according to Thomson Reuters data.
"Investing in this company is a 'Hail-Mary bet' on a blue-sky future that just does not exist," Citron said in a statement.
The short-seller said Mobileye did not own patents on advanced driver assistance systems that could discourage competition nor did it have long-term supply commitments.
"It is Citron's opinion that much of the run in Mobileye's stock is due to the hype surrounding (autonomously) self-driving cars," it said.
Mobileye could not be immediately reached for comment.
Short-sellers make money when the stock price of a company drops. They sell borrowed shares in the hope of buying them back at a lower price, returning them to the lender and pocketing the difference.
Mobileye has said it expects to benefit from the growing trend of semi-autonomous and autonomous cars, developed by companies such as Tesla Motors Inc and Google Inc.
Mobileye's technology detects other vehicles and objects using only a camera and software based on algorithms, unlike other systems that use complex radar-based sensors.
The stock's intrinsic value is $10.97, according to Thomson Reuters StarMine's model, which calculates the value by taking into account analysts' earnings per share growth forecasts.