Short sellers in Panera Bread are getting torched

Panera Bread short sellers have been getting torched in 2017.

The cafe and bakery chain's stock has soared about 35% so far this year on the back of better than expected fourth-quarter earnings and speculation that it's a possible takeover target.

Shares of Panera were hovering little changed for the year until the company announced its fourth-quarter results easily beat Wall Street estimates thanks at least in part to its "Panera 2.0" initiative aimed at modernizing the order, pay, and production processes.

Panera continued to climb higher in March amid speculation it was a takeover target, and saw a spike of more than 7% on April 3 following a report that it was looking into selling itself.

While the gains have been great for shareholders, the short sellers have been taking it on the chin. A report from financial analytics firm S3 Partners sent out to clients on Tuesday showed short sellers in the stock have suffered a loss of $228 million, or 32.89%, on a position of $694 million so far in 2017. They lost 5.47% in 2016.

"There is still plenty of stock left to borrow in PNRA, so there is very little chance of a short squeeze based on stock loan recalls," S3 says. "But with the stock up 38% in just over one quarter, short sellers may be ready to close out their positions if PNRA's stock price goes against them much more."