Zynga Inc (ZNGA) is the fourth largest short in the U.S. Interactive Home Entertainment Sector. After covering half their ZNGA short exposure, -33.0 million shares, by June 1st as ZNGAâ€™s stock price rose 60%, short sellers have increased their shares shorted by +79.3 million shares, an increase of 252%.
ZNGA short sellers are down -$87.0 million in year-to-date mark-to-market losses, but most of these losses occurred during ZNGAâ€™s five-month rally to start the year. Since June, ZNGA shorts are up +$33.1 million in mark-to-market profits as its share price has tumbled 7%.
Over the last thirty days weâ€™ve seen +12.3 million shares shorted, an increase of +12.5%, even as ZNGAâ€™s stock price rose slightly, +1.9%. Over the past week, ZNGAâ€™s stock price has dipped by -5.5% and short sellers have shorted 891 thousand shares into this recent price weakness.
ZNGA continues to be a general collateral stock borrow (the easiest to borrow stock at the cheapest rates) and there is still ample stock borrow supply on the street.
ZNGA short selling has slowed down over the last two weeks from its torrid summer pace. IN 2019, ZNGA short sellers have been momentum followers, covering into ZNGAâ€™s early year rally and shorting when its stock price stalled and reversed. If ZNGAâ€™s recent upward price movement continues to lose steam, we should see additional short selling into price weakness.
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Managing Director Predictive Analytics, S3 Partners, LLC
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