What Will Short Sellers Make Of The New Mattel CEO?

• Investor enthusiasm over this CEO selection seems short lived.
• Short sellers had a healthy stake in the toy maker through the holiday season.
• The stock is up sharply since the beginning of the year.

Enthusiasm among investors over Mattel, Inc. MAT selecting a new chief executive officer wore off fast, with shares down nearly 2 percent in afternoon trading on Wednesday. The toy maker has named Margo Georgiadis of Alphabet Inc GOOG GOOGL to lead the company. She succeeds Christopher Sinclair, who was tasked with overseeing a turnaround at the toy company in early 2015.

Short Sellers And Mattel

Short sellers have been cozy with Mattel this past year, with around 10 percent of the total float sold short in 2016. However, the total number of shares short stayed pretty steady in the lead up to and throughout the crucial holiday shopping season.

This maker of Barbie, Hot Wheels, Fisher Price and many other brands saw the number of its shares short rise only fractionally to nearly 31.91 million between the December 15 and December 30 settlement dates. That was 9.4 percent of the total float and the second lowest level of short interest in the past year. At the average daily volume from the end of the year, so it would take about eight days to cover all short positions.

The focus in the final weeks of the year was how well the holiday season would turn out, and investors seemed to get nervous. The share price ended the two-week short interest period more than 5 percent lower, while the Nasdaq was down a little more than 1 percent in that time. The stock has rebounded sharply since then, however, as it became clear that the numbers would be better than feared. Year-over-year, the share price is now more than 18 percent higher.