Netflix squeezes the shorts

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Chart: CNNMoney

Netflix has become a favorite target of short sellers. Short interest was over 11 million shares as of mid-January. You have to think there’s a major (and painful) squeeze taking place today following stronger than expected earnings and guidance.

It’s odd because you would have thought the bears should have seen this coming. Shares of Netflix dipped late last month after CFO Barry McCarthy resigned as people assumed the worst. But a day after announcing his departure, McCarthy appeared at a Barclays conference and quipped that he was “not sure you’d want to be short this quarter.” 

Sure, concerns about subscriber growth and revenue remain. And the stock, trading at nearly 54 times 2011 earnings estimates, is hardly a screaming bargain.

But for now, if you’re keeping score at home, that’s Netflix CEO Reed Hastings 1, Whitney Tilson and other hedge fund managers, 0. — Paul

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