Equifax hack: Traders still betting on further stock losses



Equifax trading floor
Traders
are refusing to let Equifax off the hook as they continue to add
to short positions.

Reuters / Brendan
McDermid


Traders aren’t yet ready to let Equifax up off the mat.

Short interest — a measure of wagers that share prices will drop
— has continued to climb since initial reports of the company’s
massive data breach that cost its CEO his job.

It now sits at $281 million, according to the financial-analytics
firm S3 Partners. Further, traders are
holding 2.6 million shares short, an increase of 570,000 since
the hack was first announced.

All of that has occurred even as shares have mounted a 14%
recovery, which followed a 35% plunge immediately after the hack
was first announced.

That investors have been willing to stick with their short wagers
even as Equifax’s stock has rallied shows the level of conviction
they have that the company’s fortunes will sour further.

And they still have shares at their disposal, should they want to
add to short positions. Right now, only 2.2% of Equifax’s
available shares are being used, leaving ample stock available to
borrow, S3 says.

One last interesting wrinkle to the Equifax story is that it
wasn’t short sellers who drove the large drop in the company’s
stock — it was long holders who elected to decrease their
holdings, according to S3.

In other words, a disproportionate number of Equifax shareholders
are now holding the stock short, aka betting on it to fail.
That’s a dicey position for the company, recent rebound or not.


Screen Shot 2017 09 27 at 4.47.44 PM
Markets
Insider




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