Nationwide coffee behemoth Starbucks (SBUX) has seen its shares rise alongside the general growth of the S&P 500 Index from the beginning of 2017 through the middle of the year. SBUX shares have yielded 8% while the S&P 500 has grown by 8.5%. That has not been enough, though, to convince some investors that the stock price will continue to rise. In fact, according to research by S3 Partners, more and more bearish investors are loading up on bets against Starbucks' stock price. Now, more than $1.62 billion worth of exposure is at risk on the short side, as investors pile on bets that Starbucks' stock price will decline at some point in the future.

Shorted Shares Double So Far This Year

As of December 30 of last year, short sellers borrowed just over 13 million shares of SBUX. S3 has offered a real-time projection for mid-June of 2017 which suggests that 26.52 million shares are now being shorted. This marks an increase of 102.8%, for more than double the total number of shorted shares at the beginning of the year. Alongside this increase has been an overall gain in the amount of money being risked on the bet against Starbucks' stock. As of the end of December in 2016, investors had wagered $726.03 million against the coffee company; today, that figure has ballooned up to $1.62 billion, marking an increase of 122.5%. By comparison, bearish investors are generally down by $70.8 million, or about 7%, on an average short position totaling $1.01 billion for this year.

Signs That Bearish Bets Will Continue

S3 indicates in a blog post that bearish investors have continuously added more shorted shares to their coffers, incrementally growing their short exposure since the beginning of the year. Beyond that, the analytics firm believes that there is at least one more reason to expect that short bets on SBUX will continue to accumulate in the near future. Wedbush Securities has recently released an analyst note which downgrades Starbucks stock from an Outperform status down to Neutral. The reason for this is concerns over the valuation of the stock. Because of this other analytical push against SBUX stock, S3 predicts that more investors will join the wager against the value of SBUX, and that the total number of shorted shares will continue to increase.

Starbucks saw disappointing Q2 sales figures and slow growth rates earlier in the year, according to Reuters. Kevin Johnson became the new CEO in April of this year, succeeding longtime leader Howard Schultz. Simultaneously, the company lowered its full-year target for net earnings from $2.09 to $2.11 per share down to $2.06 to $2.10 per share.

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