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Short Interest In Zynga Rises Again (ANGI, YELP, ZNGA)

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Among the social media companies based in the United States, Angie's List (NASDAQ: ANGI), Yelp (NYSE: YELP) and Zynga (NASDAQ: ZNGA) saw the most significant upswings in short interest between the July 15 and July 31 settlement dates. They bucked the trend, though.

Short interest in eBay (NASDAQ: EBAY), Facebook (NASDAQ: FB), Google (NASDAQ: GOOG), Groupon (NASDAQ: GRPN), LinkedIn (NYSE: LNKD), Pandora (NYSE: P) and Shutterfly (NASDAQ: SFLY) declined in that time.

The number of shares sold short in United Online (NASDAQ: UNTD) was essentially flat in the final two weeks of July, compared to the previous period.

Also, note that the number of U.S.-listed shares (or ADRs) sold short of Chinese social media companies Baidu (NASDAQ: BIDU), Renren (NYSE: RENN) and YouKu Todou (NYSE: YOKU) also shrank, while those in Sina (NASDAQ: SINA) and Sohu.com (NASDAQ: SOHU) grew to the end of July.

See also: Short Sellers Return to United Continental

Angie's List

Short interest in this Indianapolis-based operator of online review sites increased more than 10 percent to about 11.67 million shares in the final weeks of July. That was the highest number of shares sold short in at least a year and was more than 28 percent of the float. The days to cover fell from about 11 to less than seven.

Angie's List cut its net loss in the second quarter and revenues were in line with expectations. The company now has a market capitalization of about $1.4 billion. The long-term earnings per share (EPS) growth forecast is about 46 percent, though the operating margin is in negative territory.

The consensus recommendation of the analysts who follow the stock and were surveyed by Thomson/First Call is to buy shares. The mean price target, which is where analysts expect the share price to go, is about 19 percent higher than the current share price and would be a new multiyear high.

The share price is more than 114 percent higher than at the beginning of the year, despite pulling back about eight percent from a recent 52-week high. Over the past six months, the stock has underperformed Yelp, but outperformed the Nasdaq and the S&P 500.

Yelp

This San Francisco-based company saw its short interest swell more than 11 percent in the latter part of July to about 6.66 million shares. That was the highest number of shares sold short in the past year, and it represented more than 23 percent of the total float. The days to cover was more than three.

Yelp posted a smaller-than-expected net loss for the second quarter and strong revenue growth. The company has a market cap near $3.3 billion. While Yelp has a long-term EPS growth forecast of about 20 percent, its return on equity is in the red. 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 is higher than their mean price target, meaning the analysts see no upside potential at this time.

The share price jumped more than 36 percent following the second-quarter report. It is more than 157 percent higher year-to-date. The stock has outperformed the likes of Yahoo! (NASDAQ: YHOO), as well as the broader markets, over the past six months.

Zynga

Short interest in the San Francisco-based online social games operator surged about 36 percent to 41.53 million shares during the period. That was the highest number of shares sold short in a year, and it represented about eight percent of Zynga's total float. Days to cover was less than two.

Shares plunged after the Zynga said that it would abandon its pursuit of real-money online gambling in the United States. The company has a market cap of more than $2 billion. The long-term EPS growth forecast is about 21 percent, but here too the return on equity is in the red.

Only two of the 23 surveyed analysts recommend buying shares, while 17 recommend holding them. Hold has been the consensus recommendation for at least three months. The analysts' mean price target suggests more than 10 percent upside potential, though that is due to the recent drop in share price.

The share price has retreated about 16 percent in the past month but still is up about 23 percent year-to-date. Over the past six months, the stock has underperformed Electronic Arts (NASDAQ: EA) and Facebook, as well as the broader markets.

See also: Meritage Homes, NVR See Big Short Interest Swings

At the time of this writing, the author had no position in the mentioned equities.

Posted-In: Angie's List EBAY electronic arts Facebook Google GrouponShort Ideas Trading Ideas Best of Benzinga

 

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