We've seen in recent weeks that a little hate can go a long way. Heavily shorted stocks have been running higher, shaking out the naysayers. A whiff of good news is often all it takes to get a short squeeze going, but even companies with gloomy outlooks are rising these days.
Don't fall for the wrong out-of-favor investments. Sirius XM Holdings (SIRI), Bilibili (BILI 10.97%), and fuboTV (FUBO -3.50%) have a lot of speculators betting against them. Between 15% and 25% of their public float is currently being shorted. You will find several companies with heavier short interest, but these three stocks are growing with attractive near-term catalysts to make the boo birds regret their decisions.
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Sirius XM Holdings
A dozen years ago Sirius XM was on the brink of bankruptcy, with shares trading for as little as a nickel. It was easy to shake your head at the satellite radio provider then, bleeding money and struggling to get antitrust regulators to sign off on the combination of Sirius and XM. Why would 17% of Sirius XM shares be shorted now?
Sirius XM has been consistently profitable every year since 2010. The growth isn't flashy. We've seen Sirius XM's organic revenue growth rise as little as 3% and as high as 14% every year, but it's always been positive in each of the past 11 years. Folks keep flocking to satellite radio, even last year. There was a pandemic keeping people out of their cars and a recession prompting consumers to cut superfluous overhead, but Sirius XM still managed to close out 2020 with 909,000 more self-pay subscribers than it had when the year began.
The bearish argument that Sirius XM is a transitory technology hasn't panned out. We've had years of connected cars and popular streaming apps, and satellite radio is still growing its audience.
Bilibili
One of last year's hottest stocks isn't a household name for investors despite catering to a rapidly growing audience of 53.3 million daily active users. Shares of Bilibili have soared 653% since the start of last year, and the closer you look the more obvious the winning story becomes.
Bilibili is a social portal in China that has proven magnetic to a young audience of anime, comics, and gaming fans. Despite a widening audience of users happy to put up with ads to enjoy the experience without diving into their pockets to pay, more and more of its accounts are stepping up to enhance their online gaming experiences by going premium. Bilibili's total audience has climbed 42% over the past year, but its monthly paying users have risen 89% in that time to hit 15 million (or 28% of its total base).
Bilibili is also stepping on the gas. After seeing revenue growth go from 67% in 2018 to a still impressive 64% in 2019 it seemed as if Bilibili would be just another fast-growing online platform to begin the gradual descent of decelerating top-line growth. The story hasn't played out that way. Revenue has risen 71% through the first three quarters of last year, including a 74% surge last time out. Shorting Bilibili seems silly silly.
fuboTV
Let's huddle up and talk about sports. It's true that Sunday's Super Bowl drew the smallest U.S. audience in 14 years, but the live sports market continues to hold up better than the rest of the traditional media network programming. When folks cut the cord from their cable and satellite television providers -- a liberating experience -- there still is a hunger for live sports.
Live TV streaming services have exploded on the scene as a replacement to old-school cable boxes and satellite dishes. You may be familiar with YouTube TV, Hulu+ Live TV, and Sling TV, but none of them are growing faster than fuboTV. It saw its premium subscribers explode from 316,000 to 545,000 in 2020. Like Bilibili its top line is also accelerating, going from 71% growth in the third quarter to a 77% to 83% increase in the fourth quarter.
Despite all of the leading live-TV streaming services jacking up their prices to keep up with programing costs we're finally at the point where fuboTV's average revenue per user has exceeded its average cost per user. A month of fuboTV starts at $64.99 a month. It's generating healthy ad revenue on top of that, and later this year we'll see the optionality of fantasy sports and online gambling after a pair of recent acquisitions. Nearly a quarter of fuboTV's float is currently being shorted, but you may want to think twice before shorting a stock that has more than quadrupled since hitting the market just four months ago.
