2024 Short-Side P\L Recap
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Short sellers once again “outperformed” the market by being down only -15% in mark-to-market losses while the major indexes were up over 20% (S&P 500 +23%, Nasdaq +29% & Russell 3000 +22%). Shorts performed worst in the Information Technology and Communication Services sectors as tech outperformed most other sectors and eked out modest gains in the Materials and Health Care sectors. Overall, short sellers were down -$180.9 billion in 2024 mark-to-market losses, down -15.06% on an average short interest of $1.2 trillion.
Sector
2024 Avg Short Int
YTD MTM P\L
P\L %
Communication Services
$88,362,402,667
($20,853,513,231)
-23.60%
Consumer Discretionary
$185,262,501,334
($32,639,954,307)
-17.62%
Consumer Staples
$52,961,407,488
($2,748,983,366)
-5.19%
Energy
$80,149,022,398
($2,917,961,037)
-3.64%
Financials
$155,332,877,686
($32,241,574,939)
-20.76%
Health Care
$135,850,532,681
$2,197,287,489
1.62%
Industrials
$127,978,993,929
($17,542,641,302)
-13.71%
Information Technology
$269,366,339,629
($71,120,063,231)
-26.40%
Materials
$40,039,225,696
$2,309,903,727
5.77%
Misc (SPACs)
$13,726,438
($2,782,263)
-20.27%
Real Estate
$38,194,991,713
($909,089,281)
-2.38%
Utilities
$27,707,215,339
($4,451,346,009)
-16.07%
Grand Total
$1,201,219,236,999
($180,920,717,749)
-15.06%
The number of profitable versus unprofitable shorted stocks was relatively even with 47.5% of all shorted stocks earning positive returns versus 46.3% of all shorted stocks posting losses (6.2% of shorted stocks had no mark-to-market P\L). But the big bets were unfortunately on the losing side of the ledger with only 32.7% of every dollar shorted in the black versus 67.2% in the red (0.1% of dollars shorted had no P\L).
One out of every two shorted stocks were profitable but two out of every three dollars shorted lost money. There were crowded positions on the short side of the market, but the majority of them were unprofitable (see NVDA & TSLA).
Looking at the top winners, in dollar terms, on the short side we see a mix of tech, health care and renewable energy stocks on the plus side and only four trades with over $1 billion of mark-to-market profits. There were $394 billion of profitable short trades that were up $99.5 billion in mark-to-market profits, +25.3%.
2024 YTD MTM P\L
Ticker
Avg Short Int.
MTM P\L
P\L %
INTEL CORP
INTC US
$2,695,893,356
$2,319,205,480
86.03%
MODERNA INC
MRNA US
$2,227,787,412
$1,635,042,488
73.39%
ADVANCED MICRO DEVICES
AMD US
$6,712,970,642
$1,311,627,085
19.54%
PINDUODUO INC ADR
PDD US
$3,768,835,280
$1,289,711,261
34.22%
MICROCHIP TECH INC
MCHP US
$2,090,796,461
$918,311,718
43.92%
ALBEMARLE CORP
ALB US
$1,480,620,358
$908,831,911
61.38%
ADOBE SYSTEMS INC
ADBE US
$3,213,899,510
$861,252,738
26.80%
RIVIAN AUTOMOTIVE INC
RIVN US
$1,600,716,235
$858,604,996
53.64%
SOLAREDGE TECHNOLOGIES
SEDG US
$456,508,555
$855,563,342
187.41%
ENPHASE ENERGY
ENPH US
$1,384,710,959
$821,873,341
59.35%
SUPER MICRO COMPUTER INC
SMCI US
$3,434,213,573
$810,608,232
23.60%
WOLFSPEED INC
WOLF US
$470,664,605
$790,012,754
167.85%
NIO INC ADR
NIO US
$914,819,748
$789,196,086
86.27%
WALGREENS BOOTS ALLIANCE
WBA US
$776,511,934
$762,473,514
98.19%
CVS HEALTH CORP
CVS US
$1,362,035,551
$716,288,305
52.59%
TORONTO-DOMINION BANK
TD CN
$2,950,629,390
$603,951,656
20.47%
NIKE INC B
NKE US
$1,746,429,170
$601,764,844
34.46%
UNITY SOFTWARE INC
U US
$672,408,538
$586,335,901
87.20%
MONGODB INC
MDB US
$1,250,751,683
$571,365,705
45.68%
ON SEMICONDUCTOR
ON US
$1,680,279,762
$554,981,306
33.03%
BCE INC
BCE US
$1,001,972,592
$536,615,249
53.56%
KOHLS CORP
KSS US
$788,708,137
$521,374,464
66.10%
SNAP INC
SNAP US
$865,070,561
$501,097,047
57.93%
BOEING COMPANY
BA US
$2,319,114,668
$491,750,921
21.20%
CYTOKINETICS INC
CYTK US
$934,094,726
$490,628,629
52.52%
Looking at the top losers, in dollar terms, on the short side we see a mix of tech, crypto and financial stocks on the minus side and thirty-seven trades with over $1 billion of mark-to-market losses. There were $808 billion of unprofitable short trades that were down -$280.4 billion in mark-to-market losses, -34.7%.
2024 YTD MTM P\L
Ticker
Avg Short Int.
MTM P\L
P\L %
NVIDIA CORP
NVDA US
$29,770,807,293
($24,272,571,089)
-81.53%
TESLA INC
TSLA US
$20,500,039,207
($13,246,044,171)
-64.61%
APPLE INC
AAPL US
$25,963,835,961
($7,923,491,209)
-30.52%
BROADCOM INC
AVGO US
$8,896,162,579
($7,430,797,901)
-83.53%
META PLATFORMS INC
META US
$15,090,971,921
($6,924,579,172)
-45.89%
MICROSTRATEGY INC
MSTR US
$4,815,714,777
($6,619,201,510)
-137.45%
AMAZON.COM INC
AMZN US
$14,362,829,975
($5,380,846,678)
-37.46%
APPLOVIN CORP
APP US
$2,172,653,438
($5,170,064,331)
-237.96%
PALANTIR TECHNOLOGIES INC
PLTR US
$2,712,811,640
($4,908,514,855)
-180.94%
NETFLIX INC
NFLX US
$5,162,087,450
($3,343,102,485)
-64.76%
CARVANA CO
CVNA US
$2,435,783,243
($3,309,763,871)
-135.88%
ALPHABET INC A
GOOGL US
$10,354,574,270
($3,123,049,011)
-30.16%
MICROSOFT CORP
MSFT US
$23,893,912,005
($2,427,896,440)
-10.16%
TAIWAN SEMICONDUCTOR ADR
TSM US
$4,216,525,148
($2,174,512,656)
-51.57%
ALPHABET INC C
GOOG US
$6,605,858,671
($1,938,521,460)
-29.35%
COSTCO WHOLESALE
COST US
$5,397,422,134
($1,632,868,329)
-30.25%
JPMORGAN CHASE CO
JPM US
$4,943,638,264
($1,610,871,981)
-32.58%
VAPOTHERM INC
APO US
$2,584,655,086
($1,502,738,052)
-58.14%
WAL-MART STORES
WMT US
$2,632,657,204
($1,454,277,719)
-55.24%
EXXON MOBIL CORP
XOM US
$6,959,643,687
($1,343,208,556)
-19.30%
VISA INC
V US
$7,456,153,294
($1,283,217,935)
-17.21%
ROYAL CARIBBEAN CRUISES
RCL US
$2,271,632,952
($1,280,326,391)
-56.36%
SOUNDHOUND AI INC
SOUN US
$397,867,382
($1,251,400,169)
-314.53%
VISTRA ENERGY CORP
VST US
$948,661,084
($1,249,525,588)
-131.71%
IBM CORP
IBM US
$4,279,161,499
($1,231,754,289)
-28.78%
Looking at profitable versus unprofitable short trades in dollar terms skews to the larger cap stocks with larger short interest. But looking at P\L % gives us the best and worst stock picks on the short side.
The best short trades in percentage terms with over $50 million of average short interest were:
2024 YTD MTM P\L
Ticker
Avg Short Int.
MTM P\L
P\L %
SPIRIT AIRLINES INC
SAVEQ US
$103,544,704
$360,655,929
348.31%
PACIFIC BIOSCIENCES OF CALIFORNIA
PACB US
$132,829,011
$328,776,856
247.52%
VIRGIN GALACTIC HOLDINGS INC
SPCE US
$83,029,835
$198,963,425
239.63%
STEM INC
STEM US
$51,021,644
$120,967,204
237.09%
IROBOT CORP
IRBT US
$59,147,258
$133,393,391
225.53%
GINKGO BIOWORKS HLDGS INC
DNA US
$154,624,835
$342,298,104
221.37%
CABALETTA BIO INC
CABA US
$78,518,825
$167,423,306
213.23%
AGILON HEALTH INC
AGL US
$215,589,566
$459,008,631
212.91%
CHEGG INC
CHGG US
$68,254,708
$143,442,763
210.16%
SUNPOWER CORP DELISTED
SPWRQ US
$66,292,374
$128,137,448
193.29%
SOLAREDGE TECHNOLOGIES
SEDG US
$456,508,555
$855,563,342
187.41%
LUMINAR TECHNOLOGIES INC
LAZR US
$130,290,537
$236,524,363
181.54%
MEDIFAST INC
MED US
$63,237,815
$111,835,638
176.85%
NIKOLA CORP
NKLA US
$106,691,257
$187,574,458
175.81%
ZENTALIS PHARMA
ZNTL US
$110,994,503
$188,998,129
170.28%
EDITAS MEDICINE INC
EDIT US
$84,268,249
$142,907,038
169.59%
WOLFSPEED INC
WOLF US
$470,664,605
$790,012,754
167.85%
SUNNOVA ENERGY INTL
NOVA US
$249,145,726
$417,708,199
167.66%
FUELCELL ENERGY INC
FCEL US
$75,225,078
$125,188,569
166.42%
10X GENOMICS INC
TXG US
$213,105,580
$307,756,320
144.41%
SAGE THERAPEUTICS INC
SAGE US
$93,872,356
$126,883,047
135.17%
BIOMEA FUSION INC
BMEA US
$106,796,815
$141,561,691
132.55%
OVERSTOCK.COM INC
BYON US
$79,857,815
$102,940,814
128.91%
SHOALS TECHNOLOGIES GRP
SHLS US
$191,084,169
$245,374,109
128.41%
SIGMA LITHIUM CORP
SGML US
$151,671,628
$193,043,876
127.28%
The worst short trades in percentage terms with over $50 million of average short interest were:
2024 YTD MTM P\L
Ticker
Avg Short Int.
MTM P\L
P\L %
INTUITIVE MACHINES INC
LUNR US
$69,278,072
($228,129,259)
-329.30%
SOUNDHOUND AI INC
SOUN US
$397,867,382
($1,251,400,169)
-314.53%
BITDEER TECHNOLOGIES GROUP
BTDR US
$55,362,016
($156,848,282)
-283.31%
ROCKET LAB USA INC
RKLB US
$427,929,551
($1,149,295,233)
-268.57%
APPLOVIN CORP
APP US
$2,172,653,438
($5,170,064,331)
-237.96%
THE REALREAL INC
REAL US
$58,458,129
($131,972,836)
-225.76%
EOS ENERGY ENTERPRISES INC
EOSE US
$94,121,763
($212,269,193)
-225.53%
INNODATA INC
INOD US
$53,993,248
($117,085,140)
-216.85%
GENEDX HOLDINGS CORP
WGS US
$64,291,870
($137,582,264)
-214.00%
IONQ INC
IONQ US
$492,388,484
($1,051,755,684)
-213.60%
OKLO INC
OKLO US
$85,895,065
($167,289,896)
-194.76%
PALANTIR TECHNOLOGIES INC
PLTR US
$2,712,811,640
($4,908,514,855)
-180.94%
LONGBOARD PHARMA INC ACQUIRED
LBPH US
$109,119,152
($197,207,904)
-180.73%
SCHOLAR ROCK HOLDING CORP
SRRK US
$241,956,625
($412,452,171)
-170.47%
NUSCALE POWER CORP
SMR US
$188,395,897
($320,963,580)
-170.37%
DAVE INC
DAVE US
$50,295,108
($84,235,136)
-167.48%
RUMBLE INC
RUM US
$90,532,565
($151,011,595)
-166.80%
CREDO TECHNOLOGY GROUP HLDNG
CRDO US
$250,951,874
($379,661,738)
-151.29%
SUMMIT THERAPEUTICS INC
SMMT US
$190,549,529
($287,407,152)
-150.83%
OMEROS CORP
OMER US
$55,086,419
($78,143,067)
-141.86%
NEXTNAV INC
NN US
$100,796,950
($139,905,794)
-138.80%
MICROSTRATEGY INC
MSTR US
$4,815,714,777
($6,619,201,510)
-137.45%
CARVANA CO
CVNA US
$2,435,783,243
($3,309,763,871)
-135.88%
HARROW HEALTH INC
HROW US
$106,637,001
($143,977,682)
-135.02%
ARCHER AVIATION INC
ACHR US
$260,519,603
($343,576,236)
-131.88%
Short selling is not just a trade in what investors think will be an underperforming stock, it is also a necessary activity used by hedge funds to increase leverage in a portfolio. By offsetting long positions with short positions a hedge fund can hopefully reduce net market exposure (BETA), decrease their margin requirements, and increase the amount of exposure they can hold on both the long and short sides of their portfolio.
A fund with $100 million of investable cash can build a portfolio that is long $200 million and short $100 million instead of long just $100 million. The added long and short exposure can boost returns compared to a long-only fund in a rising market as long as the long side’s positive returns outperform the short side’s negative returns. Of if the hedge fund manager is a good short-side stock picker, they can get positive performance on both sides of their portfolio and the added leverage really juices their returns.
Minimizing exposure to Crowded and Squeezable shorts can minimize momentum-based losses and correlated returns to the rest of the street. Shorting Intel instead of Nvidia, Overstock instead of Carvana or Nikola instead of Archer Aviation were both less crowded and more profitable trades which lowered portfolio risk profiles and boosted returns relative to cohorts in the market. Short selling should not be treated as just a necessary evil used to primarily increase overall portfolio leverage, but also a meaningful way to outperform the rest of the market – identifying Crowded versus less Crowded shorts and managing\minimizing Squeeze risk is a step in the right direction towards overall portfolio outperformance.
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