Shares of Fitbit are down 15.7%, at $6.08 per share, on Monday after the company 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.
And
while shareholders have been punished with a 75% plunge in the stock
during 2016, one group 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.
Research
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, in addition to the 131% that short
sellers made on the stock in 2016, according to S3.
While short sellers have been in control, S3 says, "it might not take much more than a hug to start a true short squeeze in Fitbit."
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