Why Investors Are Shorting Golf Stocks?

Golf popularity is on  the decline. Adidas a German company sounded the alarm bell in it’s recent earnings release when it reported 18% decline in its golf segment. Another German company Puma has also reported decline in its golf equipment sales.

Golf is often accused of snobbery and elitism, with the game requiring time and financial investment compared to more fast-paced alternatives. Many pundits have tried to offer a reason for the drop in interest. As well as the costs involved, the modern distractions of social networking as well as the recent poor form of Tiger Woods may be to blame.

California-based Callaway is another company that has been affected by this downturn. It draws the entirety of its revenue from golf and nearly twice as many of its shares are now out on loan compared to the start of the year, according to Markit. The firm’s shares are down by 9 percent year-to-date.

Important question that comes to mind is what the long term trend in the market? Will this slump in golf equipment sales continue long term? If it does then it means golf stocks will go down a lot in the long term. If this is a short term trend then these golf stocks will find a bottom and start climbing up from there. This slump in the golf sector is due to the fact that young people are not taking up golfing as they used to in the past.