Short sellers to take hit from Facebook
26 April 2018 London
Image: Shutterstock
Short sellers will take a hit from Facebook, which reported better than expected results at the close of market yesterday (25 April), according to an earnings report from IHS Markit.
The report showed that, while short demand for Facebook is up over 25 percent this year, there has been some notable covering over the last week with over 5 million shares returned, undoing the increase in short demand for early April.
Facebook has been embroiled in controversy in recent weeks, after it was accused of collecting the personal data of its users for political consulting firm, Cambridge Analytica.
This data was allegedly used to influence voter opinion on behalf of the politicians who hired Cambridge Analytica.
The initial scandal saw Facebook share prices fall amid public outcry.
For short sellers of Supervalu, the news is no better. According to the report, Supervalu’s share price is spiking after it reported worse than expected earnings. The short side had the weaker than expected revenue and earnings per share.
However, the price was up 7 percent intraday after Supervalu announced that it would sell and lease back eight of its owned distribution centres.
Short sellers of CBL & Associates have increased positions after the company announced that it would report earnings on Friday 27 April.
According to the report, with a share price decline of over 30 percent a year to date, “the 25 percent increase in shares short is essentially just maintaining a similar sized position in dollar terms”.
Meanwhile, shares of UK outsourcing firm Capita are down by more than 50 percent since the start of 2018.
IHS Markit said that rally “has been seen as an opportunity for short sellers who have increased their positions by more than 20 million shares since the start of April”.
In Japan, cryptocurrency firm Monex has seen a run up in price and short demand coming up to its earnings report. SInce the end of March, Monex shares are up 75 percent, while short sellers have borrowed an extra 29 million shares.
The report showed that, while short demand for Facebook is up over 25 percent this year, there has been some notable covering over the last week with over 5 million shares returned, undoing the increase in short demand for early April.
Facebook has been embroiled in controversy in recent weeks, after it was accused of collecting the personal data of its users for political consulting firm, Cambridge Analytica.
This data was allegedly used to influence voter opinion on behalf of the politicians who hired Cambridge Analytica.
The initial scandal saw Facebook share prices fall amid public outcry.
For short sellers of Supervalu, the news is no better. According to the report, Supervalu’s share price is spiking after it reported worse than expected earnings. The short side had the weaker than expected revenue and earnings per share.
However, the price was up 7 percent intraday after Supervalu announced that it would sell and lease back eight of its owned distribution centres.
Short sellers of CBL & Associates have increased positions after the company announced that it would report earnings on Friday 27 April.
According to the report, with a share price decline of over 30 percent a year to date, “the 25 percent increase in shares short is essentially just maintaining a similar sized position in dollar terms”.
Meanwhile, shares of UK outsourcing firm Capita are down by more than 50 percent since the start of 2018.
IHS Markit said that rally “has been seen as an opportunity for short sellers who have increased their positions by more than 20 million shares since the start of April”.
In Japan, cryptocurrency firm Monex has seen a run up in price and short demand coming up to its earnings report. SInce the end of March, Monex shares are up 75 percent, while short sellers have borrowed an extra 29 million shares.
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