Why are Betmakers shares attracting increased short interest lately?

Shares in betting technology provider Betmakers Technology Group Ltd (ASX: BET) are among the ASX’s most shorted, with more and more short-sellers targeting the stock.

But it’s been on the up and up over the last month.

Right now, the Betmakers share price is 46 cents. That’s 15% higher than it was a month ago. Though, it’s still 45% lower than it was at the start of the year.

For comparison, the S&P/ASX All Technology Index (ASX: XTX) has lifted 10% over the last 30 days and has fallen 26% year to date.

So, what seems to be drawing short-sellers to Betmakers? Let’s take a look.

Why are short-sellers attracted to Betmakers shares?

Betmarkers shares’ short position has been increasing alongside its share price over the last month.

Indeed, 12.35% of the company’s stock was in the hands of short-sellers as of the most recent data provided by the Australian Securities and Investments Commission (ASIC), dated 1 August.

That means the company’s short position grew from 11.81% at the same point in July and from 2.84% on 2 August 2021.

It comes despite the company having posted a notable increase in revenue in July and announcing an on-market share buyback in June.

But, as my Fool colleague James points out, rising short interest in Betmakers shares might have a lot to do with the company’s valuation.

Betmakers currently boasts a market capitalisation of around $411.5 million. That’s despite its earnings being in the red.

The betting technology stock posted a $27.8 million loss for the first half of financial year 2022. That saw its earnings per share (EPS) come in at a 3.26 cent loss.

Meanwhile, it boasted around $111 million of cash and equivalents, making up more than half of its net assets.

Whether its earnings improved further over the second half will soon be seen. The company is expected to release its full-year earnings for last financial year on 29 August.

No doubt plenty of market-watchers – as well as short-sellers – will be taking a good look at its anticipated release.

The post Why are Betmakers shares attracting increased short interest lately? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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