FOXA enters the summer lull with short sellers in clear retreat — yet a 13% float short position means bears haven't left the building.
The short-side exodus since earnings is the defining story of the past six weeks. Short interest peaked above 16% of the free float in mid-April and has since fallen to 13.4% — a drop of roughly 2.5 percentage points. The pace accelerated sharply after the May 11 earnings print, when short sellers covered quickly enough to push SI % FF from 15% to 13.6% in a single week. The absolute short count has dropped by more than five million shares since late April. That is a meaningful unwind, not noise.
Options positioning reinforces the less-bearish tone. The put/call ratio has collapsed from near its 52-week high of 2.90 — where it sat through most of April and into early May — to 1.18 now, which is nearly 1.4 standard deviations below its 20-day average of 2.21. The shift is dramatic. For weeks, options traders were loading up on downside protection. Since the earnings beat, that hedging demand has evaporated. The borrow market is equally relaxed: cost to borrow is 0.53%, cheap by any standard, and availability runs at 503% of current short interest. There is no squeeze pressure and no shortage of shares to lend.
The Street updated its view in the immediate aftermath of the results. Several major banks raised price targets — JP Morgan moved to $70 from $69, Barclays to $67 from $63, Wells Fargo to $71 from $67, and Evercore ISI to $73 from $70. The moves were modest increments rather than conviction upgrades, with all four firms holding neutral-to-equal-weight ratings. The consensus is "buy" with a mean target around $73.65, implying roughly 13% upside from the current price of $64.96. Valuation is undemanding: the stock trades at 12.3x trailing earnings, with an EV/EBITDA of 7.9x. Factor scores paint a bullish picture on forward earnings momentum, ranking in the 88th percentile on 30-day EPS momentum and the 82nd percentile on 12-month forward EPS growth — the company's live sports and news franchise continues to drive estimate upgrades. The dividend score ranks in the 98th percentile, though the dividend history in the data is stale and should not be taken as current.
The bull case rests on Fox's structural insulation from streaming disruption: live news and live sports are difficult to replicate outside a linear channel, and Tubi's digital growth gives the company an optionality asset that isn't fully priced by the Street. Bears point to the long-term overhang of NFL contract renewal costs and the secular pressure on linear viewership, concerns that kept short interest elevated above 15% throughout April. The Q3 print was strong enough to shake loose a wave of short covering, but a 13% float short is still a crowded bear trade relative to most media peers. Jericho Capital built a new 1.6 million-share position during Q1, a notable entry from a hedge fund, while State Street added 5.3 million shares through April — both moves providing a modest institutional tailwind.
The May earnings reaction itself is worth noting: the stock jumped 5.1% on the day and held most of that gain over the following week, closing the five-day window up 4.7%. The prior comparable quarter in February produced an 8% one-day pop. Both prints rewarded holders rather than punishing them, a pattern that stands in contrast to the consistent bear positioning seen through April. The next earnings window opens August 5. Between now and then, the story is whether the remaining short base — still a meaningful 13%-plus of the float — continues to cover into strength, or finds a fresh catalyst to rebuild.
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