Short Interest in Snap Rises as Wall Street Turns Against It Again

By Douglas A. McIntyre Updated Jan 11, 11:10PM EST · Published May 25, 6:55AM EDT

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Short Interest in Snap Rises as Wall Street Turns Against It Again — © Thinkstock

The short interest in social media company Snap Inc. (NYSE: SNAP) rose 16 million shares, or 17%, to 109 million shares for the period that ended May 15. It is the 11th most shorted stock traded on the New York Stock Exchange. Worse, the position is 25% of the float, a sign of how big the bet really is.

After a brief rally earlier in the year, Snap shares are back near their 52-week low of $10.50, against a high for the period of $21.75. Among the reasons are poor earnings and savage competition from much larger Facebook. In the midst of all this, Snap thinks among the most important thing it can say is that it released its own eyeglasses, dubbed “Spectacles.” On a more important note, Snap redesigned the Snapchat interface and the reception was horrible.

Although Snap’s revenue rose in the most recent quarter, that was the only good news for the period. Revenue was $149 million in the period a year ago and rose to $231 million. But Snap lost $385 million.

The press release with earnings made note of what investors had feared:

Daily Active Users (DAU) grew from 166 million in Q1 2017 to 191 million in Q1 2018, an increase of 15% year-over-year. DAUs increased 2% quarter-over-quarter, from 187 million in Q4 2017.

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Quarter over previous quarter is the number investors look at.

Snap’s description of itself:

Snap Inc. is a camera company.

We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.

We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together.

By the way, Snap is not a camera company.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.