FOXA enters the second week of June with a notable divergence in play: short sellers are trimming positions just as the stock breaks higher, yet the bears still hold a meaningful stake worth watching into the August earnings date.
The short side tells a story of retreat. Short interest has fallen roughly 10% over the past month to 13.2% of free float — still elevated in absolute terms, but the direction is clearly lower. The one-week drop of 2.2% accelerated Tuesday with a single-session unwind of 4.3%, suggesting some forced or tactical covering as the stock ran to $68.32. The borrow market is comfortable rather than stressed: cost to borrow sits at just 0.53%, barely above where it started the year, and availability is ample at around 396% — meaning more than three-and-a-half shares remain available to borrow for every share currently shorted. That leaves no squeeze pressure in the lending market. If the bear thesis is being abandoned, it is happening in an orderly way, with no sign of panic covering.
Options positioning reinforces the picture of a market growing less defensive. The put/call ratio has dropped sharply from its April highs — where it was running above 2.8, close to its 52-week extreme — to around 1.20 today, a reading that is actually slightly below the 20-day average of 1.39. This is a material shift in tone. A month ago, options traders were loading up on downside protection at a pace rarely seen over the past year. Now that hedging demand has unwound almost entirely, even as the stock climbs, suggesting the earlier caution was event-driven rather than structural.
The Street remains cautious on valuation despite the move. After the May earnings print — when FOXA rose 5.1% on the day and held most of those gains into the week — several analysts lifted targets. JP Morgan moved to $70, Evercore ISI to $73, Wells Fargo to $71, and Barclays to $67, all in May. Every one of those moves was a target raise while keeping a neutral-equivalent rating. Seven buy ratings sit in the consensus but the Street is skewing toward held-not-expanded conviction: the mean target of $73.94 sits just 8% above the current price, which is tight for a media name with structural headwinds. The bull case rests on live sports and news as durable ad formats, an improving digital revenue mix, and the FanDuel/Flutter exposure. Bears point to cord-cutting pressure, linear TV ad-budget drift toward digital experiences, and a business that is narrower than it looks after the Disney asset sale. EV/EBITDA at 8.3x is reasonable, and the PE of 12.8x has actually compressed slightly over the past month as the stock ran ahead of earnings revisions. Factor scores flag strong EPS momentum — ranked 89th percentile on 30-day forward earnings revisions — but analyst recommendation dispersion (ranked 5th percentile) reflects how few analysts have strong conviction at current prices.
On the institutional side, State Street added aggressively in May, filing a jump of 7.1 million shares to reach 8.2% of the company. Jericho Capital also added roughly 3.7 million shares as recently as March. Those are offset at the top by CEO and Chairman Lachlan Murdoch, who sold just over $40 million of stock across March 12-13 at prices between $56 and $60 — well below today's $68. The COO John Nallen also sold $12.5 million in the same window. Both executives sold into what was then a high for the year; the stock has since run materially past those sale prices.
The next scheduled catalyst is the August 5 earnings date. With short sellers unwinding, options hedges fading, and the stock up 8.5% over the past month, the setup into that print is less defensive than it has been all year — the question is whether the advertising revenue trend described in last week's note as weakening can hold up against what is now a more stretched valuation entry point for new longs.
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