The Short-Selling Speculation Starts After JB Hi-Fi Shares Got Scorched Today

Falling tablet sales hurt JB HiFi last month. Gareth Copley/Getty Images for ECB

Investors smashed JB Hi-Fi today, with its shares closing down almost 8%, after the electronics retailer said tablet sales were down in the first month of the new financial year.

Its shares lost $1.53 to $17.84 despite the company announcing a 10.3% increase in net profit to $128.4 million on a 5% increase in sales of $3.48 billion for the full year to the end of June.

All a good result.

The bit which got the market moving was CEO Richards Murray saying results in the three months to June were impacted by falling tablet sales and customer sentiment.

July was also impacted as iPad sales fell globally.

Michael McCarthy, Chief Market Strategist at CMC Markets, says there was an unusual focus on this part of a good quality result form JB Hi-Fi.

“We’ve seen 3 million shares change hands today and the average volume is 600,000,” he told Business Insider. “So that’s a huge leap in volume.”

He says there is the potential that this was an attempt to shape the news.

“The market delivers a verdict on results by moving the price up or down,” he says.

“I thought an 8% fall in light of that news today was rather extraordinary.

“Somebody with a substantial short position could consider holding until after a known event with a view to shaping how the market sees the news.”

McCarthy says it’s on only a theory but it will be interesting to study the short selling statistics for today when they are released late next week. The company is commonly among the most-shorted stocks, in terms of percentage of overall holdings, on the ASX.

The latest statistics available are those for August 5 when 12.6% of JB Hi-Fi was short. Here’s the price action today:

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