Netflix Shares Sink 9.8%, Rewarding Shorts Sellers Who Piled In
$Netflix(NFLX)$
The company kept its 2026 revenue guidance unchanged at a range of $50.7 billion to $51.7 billion, while its outlook for the current quarter ending in June of $12.57 billion missed the Bloomberg consensus of $12.64 billion.
Before earnings were released late Thursday, trading in borrowed Netflix shares that were sold short rose to 9.06 million shares, from 7.65 million shares a day earlier. The latest tally accounted for almost 14% of the total number of shares that changed hands that day, when the stock posted its seventh straight session of gains.
Chairman and Co-Founder Reed Hastings informed the company that he will be leaving the company’s board when his current term expires in June, adding another layer of uncertainty, as Netflix seeks a replacement for the man was credited for leading the company through its transformation from DVD to streaming, and the shift from a mere distributor of other's content to a global production powerhouse with popular shows including the House of Cards and Stranger Things.
Short interest volume has stayed elevated since December, building through Netflix's 40% rally from February lows through yesterday.
Amid the selloff, bargain hunters stepped in. By the end of trading Friday, inflows into Netflix outpaced outflows by $1.12 billion, with buyers coming in from all sizes including large and extra large, usually from institutional investors, and small and medium orders, including those from retail investors.
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