Little Movement in Short Interest in Social Media Stocks (EBAY, YELP, ZNGA)
Among the social media companies based in the United States, eBay (NASDAQ: EBAY), Yelp (NYSE: YELP) and Zynga (NASDAQ: ZNGA) saw the most significant upswings in short interest between the June 14 and June 28 settlement dates.
Shutterfly (NASDAQ: SFLY) also saw the number of its shares sold short rise somewhat in that time.
Also, note that U.S.-listed shares (or ADRs) sold short of Chinese social media companies Sina (NASDAQ: SINA) and Sohu.com (NASDAQ: SOHU) fell by double-digit percentages to the end of June. But short interest in Baidu (NASDAQ: BIDU), Renren (NYSE: RENN) and YouKu Todou (NYSE: YOKU) declined more modestly.
Short interest in this San Jose, California-based online commerce company increased by more than four percent to more than 15.75 million shares in late June. The number of shares sold short has risen since the end of April but was a little more than one percent of the float. Days to cover was less than two.
EBay has a market capitalization of more than $72 billion. It is expected to post double-digit revenue growth in the current quarter and the next. The long-term earnings per share (EPS) growth forecast is about 15 percent, but the price-to-earnings (P/E) ratio is about 27. The return on equity is less than 14 percent.
Of the 39 analysts who follow the stock that were surveyed by Thomson/First Call, 33 recommend buying shares, 13 of them rating the stock at Strong Buy. The mean price target, or where analysts expect the share price to go, is almost 13 percent higher than the current share price. That target would be a new multiyear high.
The share price rose more than five percent in the past month and it is now more than 40 percent higher than a year ago. But over the past six months, the stock has underperformed the likes of Amazon.com (NASDAQ: AMZN) and Overstock.com (NASDAQ: OSTK).
This San Francisco-based company saw its short interest increase more than 10 percent in the final weeks of June to more than 4.71 million shares. The number of shares sold short represented more than 16 percent of the total float, and the days to cover increased to about four.
An analyst remarked on Yelp's runaway growth potential during the period. The company currently has a market cap near $2.4 billion. While Yelp has a long-term EPS growth forecast of about 20 percent, its return on equity is in negative territory. Note that analysts do not expect the company to show a profit until 2014.
For at least three months, the consensus recommendation of the polled analysts has been to hold shares. So, no surprise, the share price has overrun their mean price target, meaning they see no upside potential at this time. Note that the street-high target is more than 11 percent higher than the share price.
The share price has risen about 25 percent in the past month and reached a 52-week high this week. The stock has outperformed Yahoo! (NASDAQ: YHOO) and the broader markets over the past six months.
Short interest in the San Francisco-based online social games operator increased more than four percent to 26.14 million shares in the latter two weeks of June. That followed a more than 16 percent rise in the number of shares sold short in the previous period. Short interest was about five percent of the float.
In June, Zynga acquired a casino gaming company, but also was a rumored takeover target. Zynga has a market cap of more than $2 billion but does not offer a dividend. The long-term EPS growth forecast is about 21 percent, but the return on equity and the operating margin are both in the red.
Only two of the 22 surveyed analysts recommend buying shares, while 17 recommend holding them. Hold has been the consensus recommendation for at least three months. The current share price is higher than the analysts' mean price target, meaning they see no upside potential at this time.
The share price has climbed more than 17 percent in the past month and is up almost 42 percent year-to-date. Over the past six months, the stock has underperformed the likes of Electronic Arts (NASDAQ: EA), but it has outperformed Facebook and the broader markets.
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