Short sellers bet heavily against Netflix Inc. (NFLX) in the run-up to the streaming giant’s fourth-quarter results.

In a research note, S3 Partners revealed that short interest in Netflix climbed 45% to $5.36 billion, reflecting a flurry of bearish calls on the stock since the start of 2019. S3 pointed out investors added 1.35 million shares of new shorts in less than three weeks, representing a 9.7% rise, and that negative sentiment around the stock increased rapidly in the days leading up to Netflix’s earnings report.

“This week, ahead of earnings, we’ve seen an increase of short selling with 360,000 shares of additional short sales as of this afternoon, +2.4%, and overall short exposure increasing by $541 million, +11.2%,” Ihor Dusaniwsky, managing director of the financial technology and analytics firm said in the note, published Jan. 17.

Increasing short selling activity coincided with a sharp rise in Netflix’s share price. The stock soared roughly 50% from its low hit in December as investors put old worries to rest and applauded the company’s decision to hike prices between 13% and 18%.

For short sellers, this meant stomaching another $1.2 billion in mark-to-market losses in less than a month, according to S3.

“NFLX short selling had been declining in the latter half of 4th quarter 2019 but began to pick up after the new year, even though NFLX’s stock price began to rally,” wrote Dusaniwsky. “Short sellers were actively selling into NFLX’s price strength, looking for a reversal back to the price weakness we saw in December.”

Were the Bears Right to Bet on Netflix’s Results Disappointing?

Netflix bears at least got their wish that the company’s fourth-quarter results would underwhelm. The streaming giant added more subscribers than predicted and beat earnings estimates, too. However, in the end, that wasn’t enough to satisfy lofty expectations — investors greeted the announcement by sending the shares down 2.83% in after-hours trading.

Dusaniwsky initially predicted that short sellers would start covering their positions if the stock continued to rally after the results, adding that Netflix’s share price could be set to return to September 2018 highs. The disappointing reaction to fourth-quarter figures has now perhaps clouded the likelihood of this scenario playing out.

Short sellers might now have greater reasons to believe that their bearish calls can be vindicated. However, it’s also true that those who started betting against the stock at the beginning of the year still need the shares to fall a fair bit more to recoup their losses.