So, is Scorpion wrong or is Citron wrong? Ironically, they appear to agree but don't really agree. A scam is a scam. A legal scheme is a legal scheme. A scam is illegal. Fraudulent. A legal scheme is not.
Buying October puts, based on the short report thesis, is a terrible risk-reward play.
This isn't some magnus opus. This is a smash and grab. We've returned to the golden days of shorts manipulated emotions. I won't say they are manipulating a stock because the SEC simply doesn't care and allows free reign for this to happen, but in two or three months, you won't hear a word on this again much like we've seen on so many other names.
I'm selling the November $5 puts on this report. While the damage takes a few days to work through, this jump in the implied volatility should subside and I believe this will play out well.