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Traders betting against Netflix lost $287 million on the streaming giant’s earnings beat — erasing all of their gains for the year (NFLX)


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Traders betting against Netflix lost $287 million on the streaming giant’s earnings beat — erasing all of their gains for the year (NFLX)

Traders betting against Netflix just saw all of their gains for the year wiped out after the stock surged on the company’s latest earnings beat. Netflix short sellers are now down more than $238 million in mark-to-market losses this year, according to data from financial analytics provider S3 Partners.The streaming juggernaut is the fifth most-shorted stock…

Traders betting against Netflix lost $287 million on the streaming giant’s earnings beat — erasing all of their gains for the year (NFLX)
  • Traders betting against Netflix just saw all of their gains for the year wiped out after the stock surged on the company’s latest earnings beat
  • Netflix short sellers are now down more than $238 million in mark-to-market losses this year, according to data from financial analytics provider S3 Partners.
  • The streaming juggernaut is the fifth most-shorted stock in the US market with about $6.13 billion in total short interest, S3 Partners said. 
  • Watch Netflix trade live.

Traders betting against Netflix just got crushed. 

Short sellers — which aim to make money by wagering that a stock will fall — erased all of their gains for the year after shares of Netflix surged as much as 8% on Thursday following its latest earnings beat. The stock also spiked 11% in after-market trading following the report.

That amounted to a roughly $287 million bloodbath for short sellers — a $44 million mark-to-market loss on Wednesday, plus a $243 million on Thursday.

Netflix shorts are now down more than $238 million in mark-to-market losses this year, according to data from financial analytics provider S3 Partners. Further, shorts have absorbed a $645.5 million loss for the month of October alone, S3 said in an email to Markets Insider. 

The streaming giant is the fifth most-shorted stock in the US market behind Apple, Tesla, Bristol-Myers Squibb, and Microsoft. It has a total of about $6.13 billion in short interest, or about 5% of the company’s shares available for trading, according to S3 Partners. 

The highlight of Netflix’s earnings report — and the likely impetus for the stock gain — was international new subscriber additions that beat Wall Street forecasts. The company also reported earnings per share that surpassed estimates.

The spike came after the stock lost about 20% of its market value following a surprising contraction in US subscribers during the second quarter, juicing short-sellers’ profits. 

Shares of Netflix are now up about 10% year-to-date. 

Read more: Wall Street’s biggest firms pay Raoul Pal $40,000 a year for his research. He explains why the market is heading for a negative-rate situation that could crush banks and roil pension funds.

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