Short selling in Nike Inc (NKE) has seen a two day spike as news of an attempted extortion plot to tarnish the sports apparel giantâ€™s reputation has been exposed.
NKE short interest is $729 million; 8.87 million shares shorted: 0.71% of its float. Between yesterday and today we have seen over 600 thousand additional shares of Nike shorted which has reversed a recent trend of short covering since early March.
Shorts were down $129 million in year-to-date mark-to-market losses in as of last Thursday, but have recouped $53 million yesterday and today and are down only $76 million now.
While we are seeing additional short selling today, we would expect that these short positions will not be longer term transactions as the extortion plot is being exposed as meritless. There should be 600 to 700 thousand shares of NKE buy-to-covers hitting the tape over the next few days.
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Managing Director Predictive Analytics, S3 Partners, LLC
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