GoPro's plunging stock made short sellers $45 million in a single day (GPRO)

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GoPro short sellers made roughly $45 million in mark-to-market profits on Monday as the company's stock plunged as much as 33%.
The stock is feeling pressure following an announcement that GoPro will lay off more than 250 employees and exit the drone industry.

While GoPro's stock came under serious pressure on Monday, there was one clear winner in its investor base: traders betting against the company.

They raked in roughly $45 million in mark-to-market profit as the company's stock plunged as much as 33%, according to data compiled by financial analytics firm S3 Partners.

The drop came after GoPro announced plans to lay off more than 250 employees and exit the drone industry, both in an attempt to return to profitability by the end of 2018. The selling did subside somewhat later in the session, however, on a CNBC report that the company had hired JPMorgan to oversee a potential sale. Later in the day, GoPro CEO Nick Woodman told Bloomberg the company would be open to sale, but isn't actively shopping itself.

GoPro's stock saw a spike in downside bets amid the negative news, with traders initiating nearly 1.5 million of new short sales. The wagers were so sought-after, in fact, that existing shorts were paying a fee of almost 15% just to keep financing their exposure, according to S3.

GoPro is now the fourth-most shorted company in the worldwide consumer electronics sector, trailing only Garmin, Sharp, and Roku, according to S3 data. Following Monday's windfall, GoPro short sellers have now made a total of $42.5 million betting against the company this year.

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The direction of GoPro shares from here will hinder on whether long shareholders end up abandoning positions, says S3. That's because borrow supply was all but vanished amid the short selling extravaganza, leaving allegedly bullish traders in charge of the stock's future.

One thing that could cause a short-term recovery in GoPro's stock would be short sellers being forced to cover their positions due to stock borrow recalls, according to the firm.

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