Short sellers are cleaning up in Fitbit
announced preliminary fourth-quarter results that were well below its previous estimate, in addition to slashing its guidance for the crucial holiday quarter. The company said it sold 6.5 million devices in the fourth quarter, and that revenue would come in at $572 million to $580 million, well below its previous guidance range of $725 million to $750 million.
TOP VIDEOS FOR YOUAnd while shareholders have been punished with a 75% plunge in the stock during 2016, there's one group that has been cleaning up: Short sellers. They amassed a massive position in the stock during the early part of January, increasing their interest by 31% up to $424 million, according to data provided by S3 Partners.
AdvertisementResearch conducted by the firm shows that while short sellers have incurred $505,000 in costs associated with borrowing shares to sell them short, they booked a mark-to-market profit of $73.5 million as of Monday. That's an 18% return in just under a month, and in addition to the 131% short sellers made on the stock in 2016, according to S3. While short sellers have been in control, S3 warns, "It might not take much more than a hug to start a true short squeeze in Fitbit."
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