Snap And Blue Apron Stock Rally Does Not Appear To Be Short Covering

By Caitlin Huston Markets MarketWatch Pulse

Though Snap Inc. and Blue Apron Holdings Inc. stocks are rallying ahead of both of their earnings reports Thursday, it does not appear to be the result of a large amount of investors covering short positions. Shares of Blue Apron were up 5.7% Wednesday afternoon and Snap shares were up 3.7%. According to S3 Partners, a financial analytics firm, short interest in both stocks has remained "relatively stable" as of late, with 12.4 million Blue Apron shares being shorted Wednesday, on the low end of its average 12.4 to 13.3 million shares that have been shorted since the last week of July. Blue Apron has a limited supply of stock available to short, but Ihor Dusaniwsky, managing director of predictive analytics at S3, says investors appear to be holding on to their positions despite borrow fees as high as 70% Wednesday. For Snap, the number of shares shorted have been "relatively stable since mid-June," according to S3, with a range of 67 million to 71 million shares. On Wednesday, 70.2 million shares were shorted, even as Snap shares come relatively cheap. "We are seeing shares shorted remaining stable even though financing rates have dropped drastically," Dusaniwsky said. Shares of Snap have fallen 21% in the past month and Blue Apron shares have fallen 18%, while the S&P 500 has gained 2%.

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