• Research

Sep 20, 2017

S3 Analytics: Short Sellers Targeting Ad Tech Platform The Trade Desk

It’s been approximately one year since advertising technology platform The Trade Desk (TTD) listed its shares as a public company.  Early investors have been handsomely rewarded, yielding around a 100% return on their investment since the IPO.  This early success and current high valuation certainly has drawn its skeptics though, as short bets has spiked significantly over the past month of trading. 

S3 Partners calculates current short interest to be 3.97 million shares, with $245 million at risk, both all-time highs.  This is an increase of 40.1% and 69.5% over just the past month, when the 8/15 exchange reported figure came in at 2.83 million shares and $144.5 million at risk, respectively.  This means that an additional $100 million has been added to the short side in this relatively short period of time.  

As mentioned above, Jim Cramer, host of the popular CNBC show “Mad Money”, told viewers during the “Lightning Round” segment on 9/19: “I get it, I like these advertising platforms, they’re very hot, but the stock is up way too much.  I’m going to say don’t buy.”

With a P/E ratio 67, this is about double the most comparable competitor in the web advertising space, French-based Criteo (CRTO), which trades at a 34 P/E ratio currently.  

After smashing all expectations and handily beating Wall Street forecasts on both Q1’17 and Q2’17 results, bears are positioning themselves for a potential windfall if Q3’17 results fall short of the lofty outlook.   

Want deeper insight into the above analysis? Contact:
Matthew.Unterman@s3partners.net
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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