Expedia Group’s Short Percent of Float Declines 42.75%: What Does it Mean?
Expedia Group (EXPE) has experienced a significant decrease in its short percent of float, falling by 42.75% since its last report. The company recently announced that it has 5.38 million shares sold short, accounting for 4.66% of all regular shares available for trading. Additionally, based on its trading volume, it would take traders an average of 2.4 days to cover their short positions.
Understanding Short Interest
Short interest refers to the number of shares that have been sold short but not yet covered or closed out. Short selling is a trading strategy where traders sell shares of a company they do not own, anticipating a decline in the stock’s price. Traders profit from short selling when the stock price falls, but they face losses if it rises.
Short interest is a crucial metric to track as it can serve as an indicator of market sentiment towards a particular stock. An increase in short interest suggests that investors have a bearish outlook, while a decrease indicates a more bullish sentiment.
Expedia Group Short Interest Graph (3 Months)
Analyzing the short interest graph for Expedia Group over the past three months reveals a decline in the percentage of shares sold short. However, it is important to note that this does not guarantee an immediate rise in the stock’s price. Traders should be aware of the decreased short interest but consider other factors before making investment decisions.
Comparing Short Interest with Peers
Comparing a company’s short interest with its peers is a common technique used by analysts and investors to assess its performance. Peers are companies with similar characteristics, such as industry, size, age, and financial structure. Identifying a company’s peer group can be achieved by reading its 10-K report, proxy filing, or conducting a similarity analysis.
According to Benzinga Pro, the peer group average for short interest as a percentage of float is 7.63%. This indicates that Expedia Group has less short interest compared to most of its peers. However, it is essential to consider other relevant factors when evaluating a company’s performance and making investment decisions.
Bullish Implications of Increasing Short Interest
Contrary to popular belief, increasing short interest can sometimes be bullish for a stock. Benzinga Money explains in a detailed post how investors can profit from short squeezes, which occur when short sellers rush to cover their positions due to a significant increase in stock price.
In conclusion, Expedia Group’s short percent of float has experienced a substantial decline, indicating a decrease in bearish sentiment towards the stock. Traders should monitor this metric as it can provide insights into market sentiment. Additionally, comparing short interest with peers can offer further context. However, it is crucial to consider other factors and conduct comprehensive research before making investment decisions.
