3 Social Media Stocks That Short Sellers Favored For Christmas

Among the leading social media companies based in the United States,

's

C shares,

and

had the most significant upswings in

between the November 28 and December 15 settlement dates. Below we take a quick look at how Google, Pandora and Zynga have fared recently and what analysts expect from them. That is followed by a glance at short interest trends in other social media stocks.

Short interest in C shares of this Mountain View, California-based operator of Google+ and YouTube jumped about 25 percent early in the month to almost 2.88 million shares. That was about 1 percent of the float, and it more than erased the decline in short interest in the previous two periods. Analysts are looking for sequential growth of EPS for both the current quarter and the next. Its long-term EPS growth forecast is more than 14 percent, but its P/E ratio is more than the industry average. The company has a market capitalization of more than $360 billion. Class C shares are non-voting shares. Of the five surveyed analysts surveyed by Thomson/First Call, four recommend buying these shares, with three of them rating the stock at Strong Buy. They believe the shares have some head room, as the mean price target is more than 16 percent higher than the current share price. That target would be a post-split high. Short sellers watched shares drop about 5 percent in the two-week short interest period, but the stock has recovered since and looks poised to cross above the 50-day moving average for the first time since October. The stock has underperformed Facebook and Yahoo over the past six months.

Short interest in this Oakland, California-based Internet radio provider grew about 10 percent in the initial weeks of the month to more than 26.82 million shares. That was more than 13 percent of the total float, as well as the greatest number of shares short so far this year. Days to cover was about five. Credit Suisse recently

, citing increased spending on consumer marketing. The company has a market cap of less than $4 billion and a long-term EPS growth forecast of more than 66 percent. However, both the return on equity and the operating margin remain in negative territory. Of the 32 polled analysts, 23 recommend buying shares, with eight of them rating the stock at Strong Buy. They believe the shares have plenty of headroom, as their mean price target is around 38 percent higher than the current share price. That target is less than the 52-week high from early March. The share price retreated more than 12 percent during the two weeks, and it has recovered somewhat since. It is still down more than 31 percent year to date. The stock has not only underperformed the Nasdaq and the S&P 500 over the past six months, but competitor Sirius XM as well.

Short interest in this online social games operator increased about 10 percent to more than 70.48 million shares during the period. That was the greatest number of shares short in the past year, but less than 10 percent of the float. It would take about seven days to close out all of the short positions. Recent game releases may have finally helped stop the slide in Zynga shares than began last March. The San Francisco-based company now has a market cap of about $2.5 billion. Its long-term EPS growth forecast is about 30 percent, but here too the return on equity and operating margin are still in the red. For at least three months, the analysts' consensus recommendation has been to hold shares of Zynga. It does have more Buy ratings than it did 90 days ago. A move to the mean price target would be a gain of almost 20 percent for the shares. The consensus target is less than the 52-week high, though. The share price retreated about 6 percent during the short interest period, but it has recovered since, rising above the 50-day moving average. Over the past six months, the stock has underperformed not only the likes of Electronic Arts and Facebook, but the broader markets as well.

Shares short in Facebook, LinkedIn, Shutterfly and Twitter also increased in the first two weeks of December. However, short sellers retreated from Angie's List, eBay, Google (A shares), Groupon, MeetMe, United Online and Yelp during the period. In addition, note that the number of U.S.-listed shares (or ADSs) sold short of Chinese social media companies Sina, Sohu.com, Weibo and YY increased early in the month, but short interest in Baidu, Renren and YouKu Todou declined.

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