Shorts Swarm GoPro Inc (GPRO) Ahead of Earnings

GoPro Inc (GPRO) saw a 41% jump in short interest during the most recent reporting period

by Alex Eppstein

Published on Oct 28, 2015 at 2:18 PM
Updated on Jun 24, 2020 at 10:16 AM

GoPro Inc (NASDAQ:GPRO) is among several big-name companies about to enter the earnings spotlight. Ahead of tonight's event, bearish betting has picked up on shares of the action camera maker.

According to Schaeffer's Senior Quantitative Analyst Rocky White, GPRO once again saw one of the biggest percentage increases in short interest during the latest reporting period, among equities that trade at least 1 million shares per day. Specifically, short interest spiked 41%, and now makes up over half of the equity's total float -- the highest among the 50 stocks that generated the biggest short interest spikes.

This isn't especially surprising, given the shares' long-term performance. While GPRO is up 4% today at $29.38, it's lost over half of its value on a year-to-date basis, and has been struggling to re-take the round $30 level in recent weeks.

Still, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GPRO has racked up a 10-day call/put volume ratio of 2.71, with long calls nearly tripling puts. What's more, this ratio ranks in the high 85th percentile of its annual range. However, given the stock's lofty short interest levels and steep losses, it's possible these call buyers are actually short sellers seeking protecting against an unexpected upside move.

That bump could happen by week's end, especially in the wake of tonight's earnings report. Over the past five quarters, GoPro Inc (NASDAQ:GPRO) has swung 10.8%, on average, in the session after reporting. This time around, the options market is pricing in an even steeper 13.9% move, based on GPRO's near-term at-the-money straddle.

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