Snap Inc.’s recent rally has burned short sellers, who have been rushing to cover their bearish positions as shares of the social-media company climbed.
A Snap SNAP, -0.88% short squeeze began in February, said S3 Partners analyst Ihor Dusaniwsky, and the number of Snap shares shorted has fallen by more than 50% since then, to 75.1 million. Short interest currently stands at 8% of Snap’s float.
Short sellers have already racked up significant paper losses on the year, standing at $1.02 billion as of late Thursday. Snap shares have jumped 165% so far in 2019, as the company rolled out its redesigned Android app and began to see stabilization in user-growth trends.