By MATT JARZEMSKY
Investors are increasingly betting that Facebook Inc.'s FB +4.02% stock—pressured by disappointing earnings and more shares potentially hitting the market—is poised to fall further.
Short sellers banking on a Facebook drop borrow shares and sell them, hoping to replace the stock by buying shares later at a lower price.
The number of the social network's shares on loan to short sellers has been rising and now stands at 97 million shares, up from 63 million a month ago, according to figures from data provider Markit.
That represents 3.5% of the company's shares outstanding, according to an analysis of Markit data.
On average, companies in the Standard & Poor's 500-stock index have about 3% of their outstanding shares out on loan.
"We shorted it right off the bat," said Rob Romero, portfolio manager at Connective Capital Management LLC, a Palo Alto, Calif., hedge fund with more than $100 million in assets under management and a roughly $2 million short position in Facebook.
"It was a great short," he said. "It's still a good short, I think, looking at the valuation compared with other companies, such as Google and Apple."
A Facebook spokeswoman declined to comment.
Stock sales by some early investors this week could facilitate further bearish betting, as the number of shares that speculators can use for short sales are liable to increase.
On Thursday, "lockups" that have prevented some early Facebook backers from unloading their stakes begin to expire, which means they will be able to sell shares into the market.
Overall, about two billion shares are eligible to sell off between now and next May, adding to the 421 million already in circulation.
Current shareholders generally will only lend out a portion of their holdings, and short sellers have borrowed about 79% of the shares available for lending, according to Markit.
That figure is up from the utilization rate of about 62% a month ago, though off the peak of 82% last week.
The high rate of use is likely making it tougher for short sellers to find enough stock to borrow, said Simon Colvin, an analyst at Markit.
"When you get to 80%...it's generally harder to source a big block of shares to short," Mr. Colvin said.
The week after the lockup on Groupon Inc.'s GRPN -3.45% stock expired June 1, short interest in the stock rose, but the utilization rate fell, because lenders were making a greater supply of shares available to short sellers.
Analysts caution that it is hard to predict whether those holding short positions now will book profits or hold out hoping for more.
"Some will probably say, 'Well, the price has fallen a fair amount from its initial offering of $38, and thus now would be a good time to sell out,' " said Tim Smith, executive vice president of Sungard Financial Systems' Astec unit, which tracks short-selling data. "But it could be that some will wait—for example, until November—and then close it out."
The increase in demand to bet against Facebook has come alongside a 31% slide in the shares' price over the past month. The stock has tumbled since Facebook reported in late July that it swung to a loss in the second quarter as revenue growth slowed and costs rose. Wednesday, the stock added 4% to $21.20.
Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com |
发表于 2012-8-15 21:25
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发表于 2012-8-15 21:29
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俺还有9月的扑没出
