- Snap is higher for the 10th time in 11 days.
- It began rallying after Citron Research’s Andrew Left published a bullish note.
- Shares got rocked after disappointing quarterly results, but have almost erased those losses.
- Watch Snap trade in real time here.
Snap shares are up more 3% Wednesday as they gain ground for the 10th time in 11 days.
They began rallying May 31, when Citron Research Founder Andrew Left published a bullish note, saying “Snap is “one stabilizing quarter from giving investors a 30% or more return — more than you can see in any FANG stock in our opinion.”
Snap has gained 33% since Left’s note, and could benefit from yet another tailwind in the near future. A short-squeeze could be on the horizon as the cost of borrowing Snap shares has risen sharply.
“Stock loan recalls will make SNAP short positions much more expensive.”Ihor Dusaniwsky, the managing director of predictive analytics at financial analytics firm S3 Partners, said in a recent note out to clients. “Even if prime brokers do their jobs well and cover the street recalls before they hit their clients, the new high cost of borrowing SNAP shares may drive a handful of shorts out of the trade.”
Shares plunged more than 25% in the wake of the company’s disappointing first-quarter results, falling to a record low of $10.50 apiece. At the time, the social-media company reported revenue that fell well short of Wall Street estimates, and said it was “planning for our Q2 growth rate to decelerate substantially from Q1 levels.” A rally back up to $14.13 a share would erase the entirety of its post-earnings drop.
Snap is down 7.49% this year.