Under Armour (UAA) shares fell as much as 17% this morning, the most since July, on the back of a WSJ story on Sunday claiming the Justice Dept. and SEC are examining the companyâ€™s accounting practices of shifting sales between quarters.Â This new disclosure to the public of a probe, that first started back in 2017, is overshadowing a better than expected third quarter profit and revenue beat reported on Monday.
On the short side of the trade, S3 Partners real-time Short Interest algorithm projects shares sold short on the A class listing to be 38.78 million shares, or 20.72% of float (actively traded).Â Notional, or dollars at risk, prior to todayâ€™s plunge measured in at $819.8 million pre-open.Â This puts UAA as the #2 most shorted US-listed equity in the Apparel, Accessories & Luxury sub-industry, when measured in notional exposure.
Bearish speculators are currently enjoying a single day mark-to-market paper profit of over $130 million today on the A class shares.Â Â This wipes out the year-to-date loss of -$79.7 million, putting short sellers back in the black for 2019.
For investors interested in the C class shares (ticker: UA), S3 Partners forecasts real-time short interest to be 10.59 million shares short; 5.53% of float; $200.3 million notional.Â Â Note that the A shares tend to trade at a slight premium to the C shares since they hold the voting rights.
Bearish speculators are seeing a single day paper gain of over $30 million today, erasing a previous loss of -$28.07 million year-to-date.
If one were to consolidate both A & C class listings, Under Armour would take the top spot in the S3 league table for most shorted US-listed Apparel, Accessories & Luxury company.Â Â One would only expect this lead to widen if more negative headlines come about after the Federal investigation.
Want deeper insight into the above analysis?
Contact:Â [email protected]
Director, S3 Partners LLC
For more information on S3â€™s reporting, data and analytics solutions, email us at [email protected]. Start your free trial of the BLACK App â€“ the only source of real-time short interest on the Bloomberg Terminal or Thomson Reuters Eikon.
For short side data and access to our research reports go to https://shortsight.com/ .
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (â€śS3 Partnersâ€ť) to be reliable and accurate.Â Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use.Â Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decisions.