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SmileDirectClub sell-off gives short sellers reason to grin – Source Reuters Tech News

(Reuters) – Traders short selling SmileDirectClub had a lot to smile about on Wednesday, earning paper profits of over $115 million as the online dental company’s stock plummeted 26% following a disappointing quarterly report.

FILE PHOTO: David Katzman (C), CEO of SmileDirectClub celebrates as the company debuts its IPO outside the Nasdaq MarketSite in New York, U.S. September 12, 2019. REUTERS/Lucas Jackson/File Photo

During the previous session ahead of SmileDirectClub’s quarterly report, short bets against it climbed to a record high 40,000 shares, equivalent to 57% of the company’s float, according to S3 Partners, a financial analytics firm.

Traders borrowing SmileDirectClub shares to make new short bets on Wednesday were paying the equivalent of more than a 31% annual interest rate, up from 26% the day before, reflecting a scarcity of additional shares available to short, according the S3 Partners. Short sellers borrow shares and then sell them, hoping to buy them back…

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Source Reuters Tech News

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