Shares of Yeti Holdings Inc. (YETI US) are up 97% YTD and 33% from the most recent earnings call (2/14).Â The rise in share price was bolstered by strong Q4 sales as well as comments on Dickâ€™s Sporting Goods (DKS) earnings report citing strong demand for YETIâ€™s products.
Contradicting the bullish comments in the YETI and DKS earnings report, short sellers have increased their positions by close to 6.4 million shares, +260%, year-to-date.Â With short sellers holding strong and supply drying up, we have seen new borrows YETI climb over the 15% Fee mark.Â Additionally, shares shorted have leveled out March, indicating that there is little supply left for short sellers and the longs are now in control of YETIâ€™s price moves.
Short sellers are down $101 million in year-to-date mark-to-market losses, – 66%, in 2019.
Real-time short interest is currently: 10.41 million shares / 63.97% of float / $289.40 million at risk.
YETI is the #4 most shorted US-listed equity in the Consumer Durables & Apparel Sector. Â Mattel, Hasbro and Polaris rank #1, #2 and #3 respectively.Â YETI is only member of the group not trading at General Collateral levels with stock borrow fees on existing shorts at 8.15% fee and the cost on new shorts ranging from 15% to 30% fee.
We expect stock borrow costs to continue rising as unfilled short demand continues to accumulate. If YETIâ€™s stock price trends higher, as it has for most of 2019, the double edged sword of high financing costs and large mark-to-market losses will begin to squeeze some of the shorts out of the trade. YETIâ€™s rally may continue with the added benefit of short covering boosting up its stock price.
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Managing Director Predictive Analytics, S3 Partners, LLC
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