Astec Analytics On Stratasys: 'Short Sellers Still Betting On The Down Side'

Stratasys Inc.'s SSYS stock is down more than 26 percent since Monday, in reaction to the company's poor guidance.

Astec Analytics’ Karl Loomes shared some of his firm's data and insight with Benzinga.

“The massive price drop this week does not seem to have spurred any short covering, but rather is still being matched by additional borrowing – which would suggests as of yet, short sellers are still betting on the down side.”

Astec Analytics’ data suggests “short sellers were building positions since mid to late January as the stock was climbing, with borrowing up 28% since Jan 21. This would indicate they were skeptical of these gains even then, or at least were willing to close their positions rather than risking further losses if the price continued to rise.”

To conclude, Loomes clarified, “the fact that borrowing was still going up even after such a strong fall in the cash market is telling. In addition, the cost of borrowing the shares – which is an indicator of demand to borrow (and thus short sell them), went up very sharply yesterday, almost doubling from about 1.5% to just under 3%.”