GoGo Inc. (GOGO US) stock price has surged 35% since releasing its Q2 earnings on Aug 4th and recent reports this week that multiple company insiders have been purchasing shares, a bullish indicator of future stock appreciation. However, short sellers look to be re-building their bearish bets and positioning themselves against this recent run, hoping for a “crash landing” of the in-flight connectivity provider.
According to the S3 Crowding Indicator, a measure of the magnitude of real-time shorting activity relative to market cap and float, there have been 4 days of shorting spikes over the past 7 days of trading. Furthermore, according to the S3 Relative Velocity Indicator, a measure of the real-time relative change in shorting activity, there has been a significant increase in the 7-Day borrowing velocity since Aug 1st, reversing the steady trend of return/short covering seen throughout July. With this renewed shorting activity, current short interest as of today is now estimated to be around $250mm, revisiting highs seen earlier this year.
Borrow utilization has trended back above 90% of total availability, and last/spot cost of borrowing new shares today has hit 6-7% fee range on an annualized basis, according to the BLACK APP™. A first class ticket to short GoGo is becoming increasingly more expensive by the day, and time may be running out for short sellers to get “on board.”
For more information on the above analysis, please contact:
Matthew Unterman, Director, S3 Partners, LLC Matthew.Unterman@s3partners.net
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