• Research

Mar 16, 2018

S3 Analytics: SNAP Short Sellers Are Rihanna Fans Today

Snap Inc.’s (SNAP) stock price is being “slapped” down by yet another celebrity tweet, down 3.6% after Rihanna instagramed that the messaging application “ain’t my fav app out there!” after the company posted an offending advertisement featuring the singer and her once boyfriend Chris Brown. This follows a negative social media posting by Kylie Jenner on February 21st that moved SNAP’s stock price down 6.1%. Short sellers are up $55 million in mark-to-market profits today, and were up $107 million in mark-to-market profits after Jenner’s February tweet.

The negative social media commentary is a welcome tailwind for short sellers this year, after being up $192 million in mark-to-market profits in 2017, they are down $484 million year-to-date in 2018. SNAP is the second worst performing short in the Application Software sector this year, behind only Workday Inc. (WDAY) shorts who are down $82 million year-to-date.

The Application Software is the 7th most shorted sector in the U.S. market and had the 14th largest increase in short exposure of the last month out of the 173 sectors we are following. Short exposure continues to increase even though the sector is outperforming both the S&P 500 and Russell 3000, up almost 20% for the year. The top ten most shorted stocks are outperforming the sector, with short sellers down almost 32% in these ten securities. Short sellers are holding onto their positions, hoping for a pullback after such an overheated 1st quarter.

Want deeper insight into the above analysis? Contact:
Managing Director Predictive Analytics, S3 Partners, LLC
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