Kylie Jenner Tweet Lands Snap Short Sellers $163 Million Profit

After getting burned by a huge earnings beat earlier this month, Snap Inc SNAP short sellers got some major help from Wall Street and Hollywood this week. Just days after a Citigroup downgrade sent Snap shares tumbling, celebrity Kylie Jenner confirmed Citi’s fears about the new version of Snapchat’s app with a single tweet Wednesday:

Snap shares tumbled 6 percent on Thursday, eliminating $1.3 billion in market capitalization. But for Snap short sellers, the tweet was welcome news after an earnings beat took many off guard earlier this month. According to financial analytics firm S3 Partners, Snap short sellers made $163 million in profits thanks to Jenner.

S3 analyst Ihor Dusaniwsky said on Friday that Snap has the largest outstanding short interest in the application software subsector with $1.99 billion in total short interest as of this week. It seems the earnings beat didn’t discourage short sellers much. S3 reports that Snap’s short interest is up another $522 million in the past month.

“Shorts have been building their SNAP short exposure since its IPO in March 2017 with short interest topping $2 billion for the first time this February,” Dusaniwsky said.

After a bumpy start to 2018, Snap short sellers are now back in familiar territory—making profits off of Snap’s falling share price. S3 reports that Snap short sellers earned a total of $285 million in profits last year, even after paying more than $171 million in stock borrowing costs.

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