Fox Shorts Caught Offside After Earnings Beat

Fox Corporation reported first-quarter fiscal 2027 results on November 4, and the reaction has wrong-footed a crowded short position: the stock closed at $67.10, up 6.9% on the day and 4.0% on the week, while short interest has kept climbing to 24.75% of the free float, its highest level in at least a year.

The short side of this trade is now under meaningful pressure. Short interest rose a further 2.3% over the past week to around 51.6 million shares, extending a build that has added roughly 15% to the position over the past month. That is a large and growing bet against a stock that just moved sharply in the wrong direction for shorts. What keeps the situation from tipping into a classic squeeze is the lending market's continued looseness: availability has tightened from around 200% at the start of October to 157% now, meaning there are still roughly 1.6 shares available to lend for every one already borrowed. The cost to borrow has barely moved, holding near 0.54% annualised. Shorts can add positions without facing the friction of a stressed borrow market, which explains why the position has continued to grow even as the stock rallied. Options traders had already leaned the other way, with the put/call ratio at 0.50, roughly 2.5 standard deviations below its 20-day average of 0.59. That was the most call-heavy reading in months, and the earnings move validated it.

The Street has warmed to Fox considerably over recent months, and the post-earnings print reinforces that direction. JP Morgan's David Karnovsky raised his price target to $83 from $82 the day after results, maintaining Overweight. That follows a more significant move from B of A Securities in mid-October, when Jessica Reif Ehrlich upgraded the stock all the way from Underperform to Buy, lifting her target to $85 from $54. With the consensus mean target at $79.80 against a current price of $67.10, the implied upside is around 19%. The bull case rests on durable live sports and news demand: management's upgraded guidance points to Cable Networks affiliate revenue growth of 4.5%, total company EBITDA of $1.36 billion for the first quarter, and full-year free cash flow of $3.1 billion. Tubi's ad-supported scale and potential Roku-related synergies add further optionality. Bears counter with the structural reality of cord-cutting and a business mix still heavily tied to the shrinking pay-TV bundle, with NFL rights costs expected to rise around 50% midpoint-to-midpoint and F27 revenue growth projected at only 1.7%. The ORTEX analyst recommendation factor ranks in the 99th percentile, an unusually strong tilt toward positive sentiment across the coverage universe.

One further dimension worth flagging is the Roku acquisition, which is reshaping how index trackers will need to position. ORTEX forecasts an 80% probability that Fox's share count increase from the stock-and-cash deal triggers a rebalance in the S&P 500, potentially forcing around $1.6 billion of buying across roughly 4.8 days of normal trading volume. Estimated dates are still tentative, with an announcement pencilled in around February 22, 2027, and an effective date of March 1. The MSCI World and CRSP US Mid carry similar forecasts, adding another $542 million and $148 million respectively in potential tracker flows. These are ORTEX forecasts, not confirmed announcements, and the index provider has not yet acted. But the scale of the mechanical buying implied is large relative to the stock's daily volume, and it sits in the background as the deal works through regulatory review.

Lachlan Murdoch holds around 20.6% of shares, anchoring the register and limiting the genuine free float. BlackRock added 1.49 million shares in the quarter to September, bringing its stake to 7.65%. FMR added over 4 million shares in the same period, now holding around 2%. On the other side of the ledger, Wikipedia page views for Fox registered a z-score of 2.5 against the company's own trailing 90 days in mid-October, pointing to elevated retail attention at a time when the stock was still under pressure from the short buildup. That attention preceded the week's sharp move higher.

The immediate focus shifts to whether short sellers reduce exposure after being caught on the wrong side of earnings, or whether the structural bear case on cord-cutting keeps the position anchored near its current elevated level. The next scheduled earnings date is February 4, 2027, which also sits close to the window when any Roku-related index rebalance announcement would be expected.