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Sep 28, 2017

S3 Analytics: Does the Market Have FAANG Fever or Flu?

Short sellers have stepped up bets against the market favorites FAANG stocks over the past 6 weeks.  S3 Partners real-time short interest analytics calculates that bearish bets against the FAANG’s (Facebook, Amazon, Apple, Netflix and Alphabet) have increased by $1.93 billion in dollars at risk.  This is an increase of 7.6% since mid-August.  S3 estimates that Total dollars at risk on the FAANG’s to be $27.3 billion.  And the shorts are really hitting the FAN with Facebook, Amazon and Netflix experiencing the largest increases (+$494m, +$502m and +$910m respectively).

As the market continues to hit high’s almost daily, these in favor companies could see a higher demand to add to shorts.  Should investors want to increase these bets, there is plenty of stock to borrow.  All of these companies continue to trade at general collateral levels, the cheapest fee or easiest to borrow stocks.  During this six week period, investors have lost $22.5 million in aggregate (a -.08% return).

With the S&P 500 Index just off its all-time high of 2,508.24 and bearish investors adding to an already elevated level of short interest the outlook for the FAANG stocks is troubling.

Want deeper insight into the above analysis? Contact:
Director, S3 Partners
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.

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