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What Movements in SPN’s Short Float Indicate about Its Future

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Superior Energy Services’ short interest

Superior Energy Services’ (SPN) short interest as a percentage of its float was 8.4% on September 14, 2016, compared to 6.9% on June 30. Since the end of 2Q16, SPN’s short interest has risen 22%.

SPN’s share price and short interest as a percentage of its float have been inversely related in the past three years. Superior Energy Services makes up 1.9% of the iShares US Oil Equipment & Services ETF (IEZ).

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Implications of short interest

Short interest is the number of a company’s shares sold short divided by its number of shares outstanding. A rise in short interest as a percentage of float, or a rise in short interest, indicates that more investors expect a stock’s price to fall.

Since June 30, SPN’s stock price has fallen ~18%, reflecting the rise in its short interest. Since June 30, SPN’s smaller market cap peer Helix Energy Solutions Group’s (HLX) share price has risen 1%.

Investors should note that the market could go against investors’ sentiments. Also, the stock’s share price could rise when investors start buying it to cover their short positions.

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