Stitch Fix (NASDAQ:SFIX) stock declined by double-digits on Thursday, reversing a positive trend that surprisingly followed an inauspicious earnings result on Tuesday evening.
Shares fell 15.48% to an intraday low of $4.10. The nadir on the day also set a new 52-week low for the stock, well below its yearly peak of $44.65. The new low for the stock followed an earnings result that reflected misses on top and bottom lines and user declines for the second quarter and forecast below-consensus earnings for the upcoming quarter.
Shares had moved upward on Wednesday despite the result before resuming declines on Thursday. S3 Partners Managing Director of Predictive Analytics Ihor Dusaniwsky told SeekingAlpha that he has seen “steady short selling in SFIX” since mid-summer with a 51.6% in shares shorted since June 16.
“Over the last thirty days we’ve seen 1.66M additional shares shorted, worth $7.8M, a 9.3% increase in shares shorted as its stock price fell -29.2%,” he told SeekingAlpha. “We will see over the next few days whether short covering has been additive buying pressure on SFIX [on Wednesday] – if short sellers are looking to realize some of their recent mark-to-market profits – which total $196.5M for all of 2022 and $5.7M in September.”
However, even if short-sellers were keen to take profits on Wednesday, Dusaniwsky expects further short-selling in the near term after the bearish earnings report.
Dig into the stock’s recent performance.