For years, Facebook Inc. (NASDAQ: FB) faced questions about how much it does or does not respect the privacy of its users. Now the social media giant is crying foul at a privacy initiative from fellow tech giant Apple Inc. (NASDAQ: AAPL). Could Facebook lose as much as 60% of its online sales, as it claims? And can short sellers smell blood in the water?
The more than 23.27 million Facebook shares short at the end of January were more than 3 million (16.2%) greater than the figure on the previous settlement date, when the short interest was at a 52-week low. The most recent figure represents about 1% of the total float. The 52-week high of about 31 million shares short was seen during last March’s market plunge. At the average daily volume at the end of the most recent period, it would take about a day to cover all the short positions.
During the period, Facebook posted strong fourth-quarter results, but it did not offer any guidance. In fact, the company has warned of uncertainty ahead due to Apple’s transparency in tracking option. Still, BofA Securities retained its Buy rating on the shares and boosted the price target to $358 per share. That would be almost a 33% gain from the most recent close.
Furthermore, the Jefferies internet team recently recommended staying with mega-cap leaders for 2021, and Facebook was one of its top picks. The team had a $320 a share price target on the stock, which represents a 17% or so gain.
The share price ended the short interest period about 5% higher than where it began, though it had been up as much as 16% during the interval. Note that the Nasdaq rose about 1% between the most recent settlement dates.
Facebook stock was last seen trading at $269.45 a share. That is in a 52-week trading range of $137.10 to $304.67 and well below the consensus target price of $336.02. The latest share price is down less than 2% since the beginning of the year, while the Nasdaq has gained almost 9% in that time.