Short sellers hoping to profit from a post-earnings sell-off on Snap shares got their wish, to the tune of a $150 million windfall.
After pushing bearish wagers to the highest level since the company’s March 1 initial public offering, selling a whopping $100 million short over a single week, they cashed in when Snap’s share price tumbled 17% over the five days ended May 12, according to data compiled by financial analytics firm S3 Partners. That included a plunge of 21% the day after the report.
It’s sweet redemption and a long-awaited profit for Snap short sellers, which had lost $28.4 million on a mark-to-market basis during the period between the IPO and the company’s inaugural earnings release.
Snap’s earnings report landed with a thud after it reported profit that missed Wall Street expectations, while also saying that user growth was at its slowest pace in years. The resulting share selloff cost Snap co-founder and CEO Evan Spiegel $1 billion of net worth.