Short sellers are expecting Howard Schultz’s political aspirations to weigh on Starbucks Corp. (SBUX) stock.

Schultz, the coffee chain’s former chair and CEO, announced Jan. 27 that he is considering a presidential run in 2020. Since then, short sellers have borrowed an additional 2.5 million shares in the company, according to S3 Partners.

Ihor Dusaniwsky, managing director of predictive analytics at the firm, said the 6.78% rise in shorted Starbucks shares over the past week represented almost half of the total rise in bets made against restaurant stocks. He added that 39.21 million of the coffee chain’s shares have now been shorted, bringing short interest up to 3.26 percent of the company’s free float.

Schultz Backlash

A sharp rise in bets against Starbuck’s stock over the past week shouldn’t perhaps come as a surprise. Since Schultz revealed his plan to run for president, campaigns to boycott Starbucks have begun appearing across social media.

Most of this backlash came from Democrats. Left-leaning members of the public were reportedly infuriated that Schultz plans to run as "centrist independent" in 2020, believing that such a move would siphon off anti-Trump votes that the Democrats desperately need.

Starbucks employees are also believed to be disappointed with Schultz’s political aspirations. Some staff, many of which idolized the company’s former chair and CEO, are now debating whether to stage a walkout, according to Business Insider.

Dusaniwsky said these concerns have given short-sellers another reason to be skeptical about Starbucks, adding that investors already had “more fundamental reasons” to doubt the stock.

“Same-store sales growth has been lagging and the enormous size of the company and number of stores coupled with maturation and saturation of the product makes exceeding analysts’ growth and revenue targets a difficult task,” he wrote. “Increased stock buybacks and dividend growth are an attractive carrot for long shareholders, but unless international growth kicks into high gear Starbuck’s valuation relative to its sector brethren may seem like paying Venti prices for a Grande product.”

Shorting Starbucks and other restaurant stocks has not been a profitable endeavor in 2019. According to S3, The $12.7 billion worth of shorts in the sector are down $1.02 billion, or 8.28%, in mark-to-market losses year-to-date.

S3 Partners

Starbucks is currently the most shorted stock in the sector, followed by Chipotle Mexican Grill Inc. (CMG), McDonald’s Corp. (MCD), Restaurant Brands International Inc. (QSR) and Darden Restaurants Inc. (DRI).