Investing

The 5 Biggest Short Sellers of Meta Stock as of Q3 2022

Short sellers feasted on Meta (US:META) shares this year as the Facebook face-lift couldn’t repair Wall Street’s fractured favorite, and its shares tumbled 66% this year, more than twice Nasdaq’s roughly 30% swoon.

Investors sold the social media giant’s shares as earnings grew and competition from the likes of Tik Tok took advertising market share.

CEO Mark Zuckerberg responded, attempting to copy Tik-Tok’s short video user experience on its Instagram and Facebook platforms. Zuckerberg also pushed and spent billions of dollars on his Metaverse vision, where Facebook would become a virtual reality space.

Meta’s October reported third quarter revenue fell 4% to $27.7 billion, and its net income fell 52% to $4.4 billion. The company reported monthly active users rose 4% to 3.71 billion. Cash and short term liquidity ended the quarter at  $41.78 billion.

This week, Zuckerberg told investors Meta would fire 13% of the workforce, or about 1,000 people, while keeping its expense outlook unchanged. The CEO reiterated that Meta anticipates that Reality Labs’ operating losses would grow significantly next year.

The Fintel quant platform identifies which funds and institutional investors have the largest net long and short positions in the market. The list for META can be found here.

The funds with the largest net short positions include:

Twin Tree Capital Management LP tops the list with a net short value of -$72.36 million. Twin Tree Capital is an alternative investment management firm focused on equity volatility based in Dallas. The fund was founded in 2009 and is headed by Micahel Presley.

Twin Tree’s position consists of direct shares and put and call options. According to the most recent 13F filings in November, the fund’s direct equity share exposure declined -by 12.7% to $55.65 million, call option exposure declined -77.79% to $37.08 million and put option exposure was reduced by -22.5% to $165.09 million.

Walleye Capital LLC is second on the list with a net short exposure of -$61.47 million in the stock. Walleye is a multi-strategy hedge fund based in Minnesota and is currently headed by Andrew Carney.

Walleye’s position consists of direct shares and put and call options. According to the most recent 13F filings in November, the fund direct equity exposure was flat, worth $17.61 million, call option exposure declined -37.68% to $51.56 million and put option exposure was increased by 33.71% to $130.63 million.

Walleye has continuously held options positions in Meta over the last ten years.

SG Americas Securities has the third largest net short exposure for META worth -$60.06 million. SG Americas is a New York based hedge fund division that is owned by French headquartered financial services giant Société Générale.

SG America’s position consists of direct shares and put and call options. According to the most recent 13F filings at the end of October, the fund’s direct equity exposure increased by 25.58% to $16.53 million, call option exposure declined -by 48.97% to $1.49 million and put option exposure was increased by 28.34% to $78.08 million.

Clear Street Markets has a net short exposure in META worth -$29.43 million. Clear Street is a New York based market making firm specializing in quantitative trading and is headed by Co-Founder Chris Pento.

Clear Street’s position consists of direct shares and put and call options. According to the most recent 13F filings in November, the fund’s direct equity exposure remained firm worth $17.19 million, call option exposure declined -75.42% to $1.99 million and put option exposure was increased by 265.88% to $48.61 million.

Eisler Capital (UK) Ltd. has a net short position of -$27.39 million in META. Eisler Capital is a a multi-strategy alternative hedge fund manager based in London, UK. The fund was founded in 2015 and is headed by Edward Eisler.

Eisler’s position consists of direct shares and put and call options. According to the most recent 13F filings in November, the fund’s direct equity exposure was reduced by -40.98% to $19.87 million. Call exposure declined -by 88.68% to $15.60 million, and put option exposure declined by -57.17% to $62.86 million.

Institutional owners on the register for Meta declined -4.61% during the quarter to 4.615.

The average portfolio allocation decreased by -9.73% to 0.98% for the remaining institutions.

Total META shares held by institutions decreased by -1.15% during the quarter to 1.89 billion.

The statistics contribute to a bearish fund sentiment score of 20.11, ranking META in the bottom 10% of 35,716 screened global securities.

This article originally appeared on Fintel

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