NEW YORK — Short sellers in Meta Platforms Inc were poised to increase their potential 2022 gains to more than $2 billion with the stock’s plunge on Thursday after the Facebook owner’s weak forecast.
With the stock down 22.3% to $247.75 in pre-market trading on Thursday, short sellers were up $1.72 billion in mark-to-market profits, according to financial and analytics firm S3 Partners. That increased such short-seller profits to $2.14 billion for 2022, according to S3.
As trading officially opened on Thursday, shares of the owner of Facebook and Instagram were last down even more steeply in morning trade, last off 23.9% to $245.94, likely increasing those potential profits for short sellers.
The social media company gave a weaker-than-expected forecast https://www.reuters.com/technology/facebook-owner-meta-forecasts-q1-revenue-below-estimates-2022-02-02, blaming Apple’s privacy changes and increased competition for users from rivals like TikTok.
Facebook short interest stood at $7.76 billion, or just over 1% of the company’s floated shares, according to S3.
Short sellers, who bet on a stock’s decline, had been up $426 million in mark-to-market profits as of Wednesday’s close.
For the year, Meta Platforms shares are now down over 26%. In 2021, as the company’s shares rose 23%, shorts were down $2.06 billion in mark-to-market losses, according to S3.
(Reporting by Lewis Krauskopf Editing by Chizu Nomiyama and Lisa Shumaker)