Under Armour Shorts See 2019 Losses Erased With Stock Slump
Investors betting against the company’s Class A shares saw a single day mark-to-market paper profit of over $130 million yesterday, which wiped out their year-to-date loss of $79.7 million. Those who shorted Class C shares also saw their 2019 loss of $28.07 million erased by a single day paper gain of over $30 million.
The stock slid after The Wall Street Journal reported, and the firm confirmed, that the Justice Department and the Securities and Exchange Commission are investigating its accounting practices. The company also reported better-than-expected third quarter earnings per share and revenue yesterday.
Before the markets opened on Monday, short interest in the company’s Class A shares was $819.8 million, which is 38.78 million shares short or 20.72% of float (actively traded). Short interest in Class C shares was $200.3 million, which is 10.59 million shares short or 5.53% of float. The Class A stock is the second-biggest U.S.-listed equity short in the Apparel, Accessories & Luxury sub-industry behind Hanesbrands Inc. (HBI).
“If one were to consolidate both A & C class listings, Under Armour would take the top spot in the S3 league table for most shorted U.S.-listed Apparel, Accessories & Luxury company,” said Matthew Unterman, a director at S3 Partners. “One would only expect this lead to widen if more negative headlines come about after the Federal investigation.”