Judging by Facebook‘s short-interest levels, a good number of investors seem to be betting that the social network’s shares will struggle for some time.
As of May 31, the company’s short interest amounted to 34 million shares, according to the Nasdaq stock market. Given its average daily trading volume of 108.3 million shares, Facebook has a fairly high short-interest ratio.
It’s yet another sign of investor dissatisfaction with the company, nearly a month after its glitch-filled debut. Facebook’s stock closed down slightly on Monday, at $27, and remains about 29 percent below its initial offering price.
More reasons for shareholders to be pessimistic about Facebook’s prospects emerged on Monday. A new report by comScore showed that the number of visitors to the social network rose only 5 percent in April, reflecting a large slowdown from the same time a year ago. The amount of time that users spend on the site is also growing at a slower rate than it has in the past.
If accurate, the report will only feed concerns that Facebook is having trouble posting the same explosive growth rates that attracted investors in the first place. Even before its troubled debut, analysts had questioned whether the company could justify its enormous valuation. At its current price, Facebook is valued at about $57.7 billion.