The stock has jumped more than 80% since Roku's IPO in late October, helped in part by the company's outperforming third-quarter earnings report on Wednesday -- its first as a public company. That's been great news for Roku CEO Anthony Wood, who has seen his net worth skyrocket almost as fast as his company's stock. Since Wednesday, Wood has added $652 million to his net worth, bringing his fortune to $1.07 billion, according to Bloomberg.
Not everyone is happy, however. Ahead of the IPO, short sellers rushed to borrow shares of Roku, but they've now lost a total of $108 million since the company went public, according to financial analytics firm S3 Partners. Following a 29% run up in Roku's stock, short-sellers have lost roughly $48.5 million.
"There was no short covering in size that would explain Roku's 130% price move, the price move was solely due to long shareholders budding up Roku's stock price," the firm explained. "...Even though ROKU's price spike may look like an attractive short entry point, there will not be significant ROKU short selling after this price move, as lendable inventory is getting thin, with only approximately one million shares left to borrow."
S3 noted that Roku is the sixth largest short in the worldwide consumer electronics sector. Tech firms Garmin (GRMN) - Get Report and GoPro (GPRO) - Get Report are the No. 1 and No. 2 most shorted stocks in the sector, respectively.
Roku smashed Wall Street's estimates in its first public earnings report, posting a loss of 10 cents per share, much narrower than analysts' projected 28 cents per share. Revenue came in at $124.8 million vs. consensus estimates of $110.5 million. The company said it expects fourth-quarter revenue to be between $175 million and $190 million, which is on the higher end of analysts' estimated $177 million.
Wood, Roku's CEO, told TheStreet that the buzz surrounding the company's successful IPO and earnings report has helped clarify what its "business model really is."
"We are a pretty misunderstood company, although I think that is starting to change," Wood said. "...It has been hard historically for people to value Roku because we are a different business, we aren't a simple business. I think being public takes the valuation out of the hands of just a few investors to the masses."
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