Source: Bespoke Investment Group
The sales gap between Amazon and brick-and-mortar store-based retailers has widened over the past year, as internet retail convenience and competitive pricing crush foot traffic to malls and physical stores. Amazon shares, however, traded lower on Friday after announcing a second-quarter profit that fell short of Wall Street estimates.
To be sure, just because a stock has big short bets against it doesn’t mean it’s guaranteed to go down further. In fact, some traders seek out the most-hated stocks on purpose in the hope there will be a so-called short squeeze. This is when a rise in the stock causes short sellers to rush in and buy back the stock to cover their short, further goosing its price.