LendingTree, Inc. (TREE) Earnings Slide a Boon to Bears

LendingTree, Inc. (TREE) reported better-than-expected earnings, yet the financial stock is down sharply

by Alex Eppstein

Published on May 4, 2016 at 10:49 AM
Updated on Jun 24, 2020 at 10:16 AM

LendingTree, Inc. (NASDAQ:TREE) reported upbeat first-quarter earnings and sales this morning, and also raised its full-year revenue guidance. However, the financial stock was last seen 3.1% lower at $82.58 amid broad-market headwinds. For bearish options traders and short sellers, this is a welcome sight.

Over the past four weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open 2.33 TREE puts for each call. In other words, the majority of speculators during the last month have been wagering on the stock moving lower.

They're not the only ones. While TREE is currently short-sale restricted, short interest jumped 15% during the most recent reporting period. In fact, a mind-numbing 42.4% of the stock's float is sold short, which would take one week to cover, at TREE's average daily trading volumes.

On the charts, LendingTree, Inc. (NASDAQ:TREE) has slipped dramatically in recent weeks, down 23% since touching a 2016 high of $106.82 in mid-April. And while today's losses are sharp, the stock has seemingly found a foothold in the $80 area -- which corresponds with its lows following a late-February upside gap on earnings.

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