Short selling in Netflix Inc (NFLX US) has been decreasing since the end of July even though its stock price continued to fall, but we should expect short selling to increase as Apple Inc (AAPL US) announced its own streaming service called Apple TV+ that will launch in November at a price of $4.99 per month. Apple joins The Walt Disney Co (DIS US) and Amazon Inc (AMZN US) in a crowded entertainment segment that Netflix was once the undisputed leader. Netflix shares trades down almost -4% after the announcement and is now down -2.16% at the close.
NFLX is the most shorted stock in the Movies & Entertainment Sector, more than doubling DIS in second place and the 6th largest domestic short overall. NFLX short interest is $6.05 billion; 20.57 million shares shorted; 4.80% of its float with a 0.30% borrow fee (General Collateral â€“ the easiest and cheapest to borrow stock with a 0.30% borrow fee (General Collateral â€“ the easiest and cheapest to borrow stock.)
NFLX short selling was very active from May through July 2019, with shares shorted increasing by +8.8 million shares, an increase of +59.5%. Since the end of July short sellers were covering in size, decreasing their short exposure by -3.04 million shares, -12.9%. Over the last month, short sellers covered -1.6 million shares, even though NFLXâ€™s stock price fell -11.59%.
Shorts are up +$131 million in daily mark-to-market profit on todayâ€™s -2.16% price move. Shorts have recouped most of their year-to-date losses and are only down -$25.9 million for the year.Â Weâ€™re seeing active NFLX short selling today and should expect more if NFLXâ€™s stock price continues to fall. Shares shorted are 3 million shares off year-to-date highs so shorts are not in uncharted territories if they choose to increase their short exposure.
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