Citron's Andrew Left targets Motorola Solutions as new short; shares off 3.5%

Famed short-seller Andrew Left revealed his latest target Tuesday — Motorola Solutions, which he said is about to see a big decline in its core business of selling "overpriced handsets."

Motorola Solutions shares were down about 3.5 percent after news of the short broke, after being off less than 1 percent earlier.

Left, of Citron Research, said in a report that Motorola Solutions has been relying on sales to government first responders in a non-competitive market. With President Donald Trump emphasizing the importance of competition for government contracts, Left believes Motorola is in trouble.

"Motorola Solutions has been coasting on a simple formula: Dote on police, fire and sheriff's departments, woo contracting officials, pursue every angle to gain a sole-source deal or an inside track, and where possible, embed equipment with proprietary features so it can't interact with competitors' products," he said.

"These tactics are borderline anti-competitive and definitely stand out in stark contrast to the new age of government approach to spending," Left added.

He set a price target of $45 for the stock, which would repersent a 45 percent decline from the Monday close.

Motorola Solutions officials were not immediately available for comment.

Left said the firm charges customers in the UK substantially less than its government clients in the U.S.,. due largely to a more competitive market. That situation is critical for a company that derives 76.7 percent of its sales domestically, he said.

But the government is pushing for a communications system called FirstNet, an interconnected communications system for first responders for which AT&T will handle the build-out. Wilbur Ross, Trump's choice for Commerce secretary, said during his confirmation hearings that he supports the "concept" of FirstNet.

"With or without government regulation or even FirstNet, the days of Motorola's closed-end business are numbered," Left said.