For years, Facebook Inc. (NASDAQ: FB) faced questions about how much it does or does not respect the privacy of its users. Now the social media giant recently cried foul at a privacy initiative from fellow tech giant Apple Inc. (NASDAQ: AAPL). Could Facebook lose as much as 60% of its online sales as it claims? And can short sellers smell blood in the water?
The more than 22.86 million Facebook shares short as of February 12, the most recent settlement date, were about 1.8% less than the figure on the previous settlement date, but 14.1% higher than the 52-week low a month ago. The latest figure was also down 15.2% from 26.98 million shares a year ago. The most recent figure represented about 1.0% of the total float. The 52-week high of about 31 million shares was seen during last March’s market plunge. At the average daily volume at the end of the most recent period, it would take more than a day to cover all the short positions.
Ahead of the period, Facebook posted strong fourth-quarter results, but it did not offer any guidance. In fact, the company has warned of uncertainty ahead due to Apple’s transparency in tracking option. Still, BofA Securities retained its Buy rating on the shares and boosted the price target to $358 per share. That would be more than a 35% gain from the most recent close.
More recently, Loop Capital hiked its $330 per share target by 12% to $370. That represents about 40% upside from Wednesday’s close.
And the Jefferies internet team recently recommended staying with mega-cap leaders for 2021, and Facebook was one of its top picks. At the time, the team had a $320 a share price target on the stock, which would be a 21% or so gain.
The share price ended the short interest period almost 5% higher than where it began, with most of that gain coming early in the two weeks. Note that the Nasdaq rose more than 8% between the most recent settlement dates.
Facebook stock was last seen trading at $264.31 a share. That is in a 52-week trading range of $137.10 to $304.67 and well below the consensus target price of $338.42. The latest share price is more than 3% lower than at the beginning of the year, while the Nasdaq has gained over 5% in that time.
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