• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Short Interest in Facebook Persists Ahead of Earnings

Facebook's short interest is not fading into earnings.
By KEVIN CURRAN Oct 30, 2018 | 10:18 AM EDT
Stocks quotes in this article: FB, AMZN, TSLA, AAPL, NFLX

Facebook (FB) remains among the top-10 shorted stocks in America ahead of its earnings release.

The bets against Mark Zuckerberg's social media empire have not subsided despite registering an almost 20% slide already in 2018 and an over 35% drop from its 52-week high.

So you bot the dip on $FB after $120bn was wiped out on 2Q earnings.... and now your down -17% SINCE that day after.

— Tim Seymour (@timseymour) October 29, 2018

According to S3 Partners, a financial technology and analytics firm, Facebook has attracted $4.9 billion in short interest, bolstered by 2.9 million shorted shares in October alone.

"This week the S&P 500 declined by 3.9% while the FAANG stocks declined by 4.7%, an 18% outperformance on the downside by the FAANG stocks which supports the theory that a significant amount of FAANG short interest is a hyper-charged Beta hedge for many portfolio managers," a report published on Monday reads.

The write-up adds that Facebook was the highest returning stock for short-sellers amid its pullback this year.

The most shorted stock in the U.S. remains Tesla (TSLA) , while FAANG compatriots Amazon (AMZN)  , Apple (AAPL) and Netflix (NFLX) all retain a larger short interest than Facebook.

Earnings Expectations

Ahead of third-quarter earnings Tuesday after the the close, the market is expecting $1.47 in earnings per share and $13.8 billion in revenue as key measures to prove shorts wrong.

Given the company's abysmal second-quarter release, a beat on these expectations will likely be vital.

On a positive note, expectations for the company are tempered a bit given the down second quarter and might offer an easier bar to clear for the Menlo Park-based company. Earnings per share were estimated at $1.74 for the second quarter, nearly $0.30 above the new Street estimate for the third quarter.

Some see the tempered expectations for Facebook as still to high.

"On the one hand you have to look at Pew Research that says that Americans use of social media has effectively plateaued," GVA Research CEO David Garrity told CNBC. "We're still in a situation where the Street's expectations for [FAANG] names are too high."

Shares opened down again on Tuesday, adding to pain for shareholders and pleasure for short-sellers, but have since seesawed between modestly positive and slightly negative in anticipation of earnings.

The company's earnings release Tuesday will prove a pivotal point to decide whether shorts can keep gaining or if Zuckerberg can turn the tide and relieve some shareholder stress.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

Action Alerts PLUS, which Jim Cramer manages as a charitable trust, is long FB, AMZN and AAPL.

TAGS: Investing | Stocks

More from Stocks

In a Week Full of Surprises, This Was the Market's Biggest

James "Rev Shark" DePorre
Feb 3, 2023 4:42 PM EST

We had the Fed's rate decision, jobs numbers, and mega-cap tech earnings land. But here's what was the wildest action.

3 High-Yield REITs for Safe Dividend Income

Bob Ciura
Feb 3, 2023 2:31 PM EST

These names have joined the ranks of the world's most elite dividend growth companies as Dividend Aristocrats and/or Dividend Kings.

Holy Fed, Batman! FAANG Has a Major Toothache!

Jim Collins
Feb 3, 2023 12:23 PM EST

Here's why the markets are sounding a lot like the campy 'Batman' show -- and how to make sure you don't succumb to the market's Joker.

Apple Is Far Better Positioned Than Amazon or Alphabet: Here's the Trade

Stephen Guilfoyle
Feb 3, 2023 12:20 PM EST

One thing is clear: Apple's disappointments are far more correctable, and their cash flow is more diversified than either AMZN or GOOGL.

Why Is Sector Allocation So Important Now?

Maleeha Bengali
Feb 3, 2023 11:00 AM EST

The fact of the matter is that the Fed knows as much as the market does, or perhaps even less.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:58 PM EST REAL MONEY

    Sarge Guilfoyle Breaks Down the Jobs Report, Fed Policy and Stocks!

    Watch it here!
  • 11:35 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading an Irrational Market
  • 02:10 PM EST REAL MONEY

    Fed Rate Decision

    Fed Lifts Benchmark Rate by 25 Basis Points, Sees ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login