Mattel Inc. (MAT) is down 16% in early morning trading after it reported 3rd quarter earnings significantly below analysts’ estimates and the toy company decided to suspend its dividend. The sales slump at Mattel continued to deepen in the wake of the bankruptcy at Toys R’ Us and the loss of the Disney princess franchise to Hasbro. Mattel short sellers are up $184.4 million in mark-to-market profits today.
S3 Partners real-time analytics calculates an all-time high of 74.5 million shares currently short with $1.1 billion dollars at risk. Despite the record levels of short interest, only 21.8% of the float is being utilized. Should bearish sentiment continue, short sellers have plenty of additional stock available to sell. Shares of Mattel trade at general collateral levels, the cheapest fee or easiest to borrow stock. Hasbro, Mattel’s main competition, has not been as heavily targeted by short sellers. Short interest remained consistent over the past month at $550 million dollars at risk.
It appears that the new CEO, Margo Georgiadis, plans to increase cost-cutting threefold, reducing the number of products that Mattel makes by 40% in the coming years. As the market continues to roar ahead into the last quarter 2017, it doesn’t appear that short sellers will take their foot off of the gas anytime soon.
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