Hunterbrook discloses Meta short position as alternative data signals Muse cooling

Hunterbrook Capital has disclosed that it holds a short position in Meta Platforms Inc (NASDAQ:META), citing alternative data suggesting a sharp decline in the adoption of Muse, the company's leading artificial intelligence application. This revelation comes from an investigative report by Hunterbrook Media, which examined tracking metrics from TickerTrends, an alternative-data provider.

The data reveals that Muse's momentum has significantly slowed since its initial surge, with weekly downloads dropping 8.1% week-over-week. On average, users downloaded the app approximately 165,000 times per day over the seven days ending October 7, a notable decrease from previous periods. Similarly, daily active user growth slowed to about 74,000 during the first week of October, a 62.4% reduction from September's average daily expansion rate of 198,000.

Hunterbrook's short position is based on the belief that market enthusiasm and valuation growth may have outstripped the reality of Muse's operational performance. The report also notes functional issues with Muse, such as access restrictions by major third-party platforms like Amazon and growing concerns over data privacy and safety.

Despite these concerns, Meta's shares experienced a minor decline of less than 0.3% following the report's publication, indicating that investors remain relatively unalarmed. Meta's stock has increased by almost 10% over the past month. As market participants await Meta's third-quarter financial results, they will closely watch whether these early trends in alternative data are reflected in the company's actual performance.