Short Sellers Like Facebook And Google Again

The largest swings in

among the leading social media companies based in the United States between the February 27 and March 13 settlement dates were to the upside. That was most evident in

,

's

A shares and

. Below we take a quick look at how these three stocks have fared recently and what analysts expect from them. That is followed by a glance at the short interest moves in other social media stocks.

Shares sold short in this social networking giant increased about 15 percent to more than 33.18 million in the period, which is less than 2 percent of the float. That was the greatest number of shares short so far this year. At the current average daily volume, it would take less than two days to cover all short positions. Facebook is expected to post annual revenue growth of more than 32 percent both this year and next. The social media giant has a market capitalization of about $232 billion. While its long-term earnings per share (EPS) growth forecast is about 31 percent, the price-to-earnings (P/E) ratio remains very high. Of 50 analysts who follow the stock and were surveyed by Thomson/First Call, 17 rate the stock at Strong Buy and 26 others also recommend buying shares. Their mean price target, or where analysts expect the share price to go, is about 10 percent higher than the current share price. Shares were down marginally during the short interest period, but less than the S&P 500. They have gained more than 6 percent since then, after Wednesday's sell-off. Over the past six months, the stock has outperformed the likes of Twitter and Google, as well as the S&P 500.

Short interest in A shares of this Mountain View, California-based operator of Google+ and YouTube dropped about 10 percent early in the month to more than 3.08 million shares. That was a little more than 1 percent of the total float, but it was the second highest number of shares short so far this year. The consensus revenue forecast for Google calls for annual growth of more than 14 percent both this year and next. Its market cap is near $386 billion. The long-term EPS growth forecast is almost 16 percent. Its P/E ratio is less than the industry average, and the return on equity is almost 15 percent. Of the 48 analysts polled, 17 rate the stock at Strong Buy, and 22 others also recommend buying shares. A move to the analysts' mean price target would be a gain of more than 9 percent from the most recent close. That consensus price target would be a new multiyear high as well. The share price ended the two-week short interest period marginally lower. It has climbed less than 3 percent since then and has been above the 200-day moving average most of this month. The stock has outperformed not only Facebook and Yahoo over the past six months, but the Nasdaq as well.

Short interest in this online consumer products and services provider had been falling since early in the year, but in the most recent period it surged more than 33 percent to more than 142,000 shares. That was about 1 percent of the total float, and the days to cover remained less than two. Subsidiaries include Classmates Online, MyPoints, FTD and NetZero. The Los Angeles area company has a market cap of more than $230 million. Its long-term EPS growth forecast is about 15 percent, but note that the return on equity and the operating margin are both in negative territory. Only two analysts were surveyed, and they both recommend buying shares and have for at least three months. The mean price target, such as it is, implies potential upside of almost 22 percent from the current share price. Shares last traded in that neighborhood in November of 2007. Short sellers watched the shares rise almost 4 percent during the short interest period, though it has fallen more than 6 percent since. Shares are still up more than 9 percent year to date. The stock outperformed the other two featured here and the broader markets over the past six months.

Short interest increased more modestly in eBay, Google C shares, LinkedIn, Pandora and Yelp in early March. The number of Shutterfly shares short was about the same at the beginning and end of the two weeks. However, short sellers shied away from Angie's List, Groupon, MeetMe, Twitter and Zynga during the period. Furthermore, note that the number of U.S.-listed shares (or ADSs) sold short of Chinese social media companies Baidu, Renren, Sina, YouKu Todou and YY and grew in the first weeks of March, while short interest in Sohu.com and Weibo shrank.

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