BlackBerry Ltd (BBRY), 3D Systems Corporation (DDD), Trulia Inc (TRLA): Short-Sellers Are Gunning for These Tech Stocks

As long as the housing market in the U.S. is booming, Trulia Inc (NYSE:TRLA) should continue to perform well. On the company’s last earnings call, Trulia’s CEO said that the U.S. housing market appears to be in a recovery, and that all national metrics look “promising.”

But that was back in July. Since then, housing data has taken a turn for the worse. Data released this week showed that pending home sales fell in July — the second straight monthly drop on record. The rising mortgage rates may be the culprit, as the interest rate on a 30-year mortgage has spiked from roughly 4.1% in June to over 4.7% in August.

Higher mortgage rates drive down housing affordability, which could put a damper on an online real estate broker like Trulia Inc (NYSE:TRLA). If that’s the case, those shorting the stock could be right. Roughly 22% of Trulia’s floating shares have been bet against.

Investing in heavily shorted stocks
Heavily shorted stocks present an interesting opportunity to investors. On the one hand, the stock is being bet against for a reason — typically, market participants see a flaw in the company’s business model.

But the herd isn’t always right. Often, highly shorted stocks can prove their doubters wrong. When that happens, shares can rapidly appreciate, as the errant short-sellers are forced to cover their bad bets.

BlackBerry Ltd (NASDAQ:BBRY), 3D Systems Corporation (NYSE:DDD) and Trulia Inc (NYSE:TRLA) all present this opportunity to would-be investors. But whether they prove to be the next Tesla Motors Inc (NASDAQ:TSLA) or the next Eastman Kodak Company (OTCMKTS:EKDKQ) remains to be seen.

The article Short-Sellers Are Gunning for These Tech Stocks originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Facebook, and Tesla Motors. The Motley Fool owns shares of 3D Systems, Facebook, and Tesla Motors and has the following options: short January 2014 $36 calls on 3D Systems and short January 2014 $20 puts on 3D Systems. 

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