July U.S.\Canada Short Side P\L
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
U.S.\Canada equity short sellers started out 2023 with large mark-to-market losses in January, followed by four months of profits, and now a second month of large losses. Short sellers were down -$53.5 billion in July month-to-date net-of-financing mark-to-market losses, down -5.2% for the month. 2023 year-to-date net-of-financing mark-to-market losses have increased to -$175.2 billion, down -18.0% for the year.
U.S.\Can July MTM P\L ($mm's)
7/31/23 Short Interest
July MTM P\L
P\L %
Communication Services
$74,686
($3,922)
-5.51%
Consumer Discretionary
$177,338
($12,326)
-7.17%
Consumer Staples
$48,428
($995)
-2.12%
Energy
$71,056
($5,120)
-7.54%
Financials
$137,070
($11,456)
-8.76%
Health Care
$126,120
($1,632)
-1.30%
Industrials
$120,161
($5,102)
-4.34%
Information Technology
$207,786
($8,817)
-4.43%
Materials
$40,122
($2,005)
-5.17%
Misc. (SPACs)
$67
($13)
-20.14%
Real Estate
$41,292
($1,759)
-4.34%
Utilities
$22,961
($358)
-1.59%
Grand Total
$1,067,087
($53,506)
-5.18%
Every sector was unprofitable for U.S.\Canadian short sellers in July with SPACs, Financials, Energy and Consumer Discretionary being the worst performing sectors.
Breaking down short selling by security we see that only 30% of every shorted stock was a profitable trade, 51% of shorted securities were unprofitable and 19% were flat for the month. But when looking at short selling in dollar terms, short sellers were concentrated in the more unprofitable securities. 75% of every dollar shorted was unprofitable, 24% was profitable and 1% was flat for the year.
The most profitable shorts in July were:
U.S.\Canada Most Profitable Shorts
Ticker
Avg Short Interest
July MTM P\L
P\L %
APELLIS PHARMACEUTICALS INC
APLS US
$600,308,026
$623,169,272
103.81%
FORD MOTOR CO
F US
$2,194,795,904
$279,248,810
12.72%
MICROSOFT CORP
MSFT US
$14,290,589,975
$227,409,845
1.59%
TC ENERGY CORP
TRP US
$2,222,008,427
$217,753,847
9.80%
TC ENERGY CORP
TRP CN
$1,469,140,408
$176,329,716
12.00%
VERIZON COMM
VZ US
$1,808,941,732
$156,589,434
8.66%
ENPHASE ENERGY
ENPH US
$1,548,495,943
$155,884,640
10.07%
EQUIFAX INC
EFX US
$1,107,440,245
$154,860,817
13.98%
MERCK & CO
MRK US
$1,931,611,272
$148,771,253
7.70%
PALO ALTO NETWORKS INC
PANW US
$5,100,471,670
$137,717,797
2.70%
PENUMBRA INC
PEN US
$1,048,737,823
$135,168,318
12.89%
AT&T INC
T US
$1,423,841,635
$133,679,685
9.39%
CHIPOTLE MEXICAN GRILL
CMG US
$1,429,235,060
$121,638,540
8.51%
OMNICOM GROUP
OMC US
$1,027,024,788
$119,978,923
11.68%
EXTRA SPACE STORAGE
EXR US
$1,852,555,979
$118,659,457
6.41%
EDWARDS LIFESCIENCES
EW US
$888,291,017
$117,763,186
13.26%
MASIMO CORP
MASI US
$368,893,221
$109,502,354
29.68%
CHEWY INC
CHWY US
$675,974,570
$103,410,184
15.30%
SOLAREDGE TECHNOLOGIES
SEDG US
$981,586,254
$102,563,007
10.45%
GAMESTOP CORP
GME US
$1,195,449,078
$99,064,410
8.29%
The least profitable shorts in July were:
U.S.\Canada Least Profitable Shorts
Ticker
Avg Short Interest
July MTM P\L
P\L %
NVIDIA CORP
NVDA US
$13,279,543,570
($1,302,358,058)
-9.81%
ALIBABA GROUP ADR
BABA US
$5,250,910,387
($1,062,717,549)
-20.24%
RIVIAN AUTOMOTIVE INC
RIVN US
$2,163,997,646
($969,382,797)
-44.80%
COINBASE GLOBAL INC
COIN US
$3,231,110,760
($956,610,326)
-29.61%
META PLATFORMS INC
META US
$8,612,099,165
($908,724,332)
-10.55%
UPSTART HOLDINGS INC
UPST US
$1,292,617,729
($867,995,562)
-67.15%
CARVANA CO
CVNA US
$1,511,189,379
($810,740,154)
-53.65%
ALPHABET INC - A
GOOGL US
$6,834,446,921
($731,982,163)
-10.71%
NIO INC ADR
NIO US
$1,296,365,290
($650,048,071)
-50.14%
AIRBNB INC
ABNB US
$3,614,756,734
($614,358,541)
-17.00%
TESLA INC
TSLA US
$25,605,031,404
($599,252,704)
-2.34%
PINDUODUO INC ADR
PDD US
$2,168,178,440
($585,543,274)
-27.01%
PALANTIR TECHNOLOGIES INC
PLTR US
$2,133,627,993
($582,593,866)
-27.31%
ALPHABET INC - C
GOOG US
$3,877,106,094
($388,082,228)
-10.01%
SUPER MICRO COMPUTER INC
SMCI US
$1,403,542,460
($387,570,592)
-27.61%
ON SEMICONDUCTOR
ON US
$2,860,091,716
($386,465,155)
-13.51%
ROKU INC
ROKU US
$857,640,523
($379,694,921)
-44.27%
XPENG INC ADR
XPEV US
$773,291,801
($371,174,191)
-48.00%
APPLE INC
AAPL US
$23,846,841,435
($360,811,624)
-1.51%
SOFI TECHNOLOGIES INC
SOFI US
$1,081,781,118
($355,659,338)
-32.88%
For the year, only the Utilities sector was the only profitable sector to short with Information Technology and Consumer Discretionary the worst performing short side sectors.
U.S.\Can YTD MTM P\L ($mm's)
2023 Avg Short Interest
YTD MTM P\L
P\L %
Communication Services
$66,816
($16,204)
-24.25%
Consumer Discretionary
$154,291
($46,764)
-30.31%
Consumer Staples
$46,795
($1,528)
-3.27%
Energy
$70,874
($2,500)
-3.53%
Financials
$129,182
($12,487)
-9.67%
Health Care
$121,816
($5,068)
-4.16%
Industrials
$110,582
($20,516)
-18.55%
Information Technology
$175,739
($63,623)
-36.20%
Materials
$38,696
($3,969)
-10.26%
Misc. (SPACs)
$173
($14)
-8.34%
Real Estate
$38,083
($2,885)
-7.58%
Utilities
$23,243
$342
1.47%
Grand Total
$976,289
($175,217)
-17.95%
The breakdown of short side profitability for the year resembles what we saw in July. Only 37% of every shorted stock was a profitable trade, 53% of shorted securities were unprofitable and 10% were flat for the month. But when looking at short selling in dollar terms, short sellers were concentrated in the more unprofitable securities. 74% of every dollar shorted was unprofitable, 25% was profitable and 1% was flat for the year.
The most profitable shorts in 2023 are:
U.S.\Canada Most Profitable Shorts
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
FIRST REPUBLIC BANK/CA
FRCB US
$332,444,845
$1,626,236,283
489.17%
SVB FINANCIAL GROUP
SIVBQ US
$374,869,988
$1,061,416,058
283.14%
MODERNA INC
MRNA US
$2,359,541,077
$971,315,824
41.17%
ENPHASE ENERGY
ENPH US
$1,267,825,184
$748,824,695
59.06%
SIGNATURE BANK NY
SBNY US
$178,614,998
$642,950,373
359.96%
PFIZER INC
PFE US
$1,869,079,829
$626,426,591
33.52%
LUMEN TECHNOLOGIES INC
LUMN US
$421,368,950
$496,588,625
117.85%
ENBRIDGE INC
ENB US
$2,138,978,302
$408,661,587
19.11%
DOLLAR GENERAL CORP
DG US
$879,007,505
$355,428,658
40.44%
NOVOCURE LTD
NVCR US
$542,980,480
$352,736,504
64.96%
AT&T INC
T US
$1,539,582,872
$346,547,175
22.51%
FIRST HORIZON NATL
FHN US
$452,422,475
$332,587,494
73.51%
SILVERGATE CAPITAL CORP
SICP US
$99,262,483
$318,673,352
321.04%
ETSY INC
ETSY US
$1,442,495,426
$310,749,180
21.54%
CVS HEALTH CORP
CVS US
$1,276,899,144
$268,128,146
21.00%
VERIZON COMM
VZ US
$1,620,532,074
$260,367,725
16.07%
ENVIVA INC
EVA US
$159,805,981
$244,963,624
153.29%
AMGEN INC
AMGN US
$1,828,400,581
$226,047,162
12.36%
WALGREENS BOOTS ALLIANCE
WBA US
$1,081,768,271
$220,728,247
20.40%
ALNYLAM PHARMA
ALNY US
$1,047,211,992
$216,794,101
20.70%
The least profitable shorts in 2023 are:
U.S.\Canada Least Profitable Shorts
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
TESLA INC
TSLA US
$17,969,431,114
($13,616,667,273)
-75.78%
NVIDIA CORP
NVDA US
$9,579,441,184
($10,391,334,099)
-108.48%
APPLE INC
AAPL US
$19,276,014,976
($7,844,843,612)
-40.70%
META PLATFORMS INC
META US
$6,220,984,511
($5,426,822,082)
-87.23%
MICROSOFT CORP
MSFT US
$11,804,544,723
($3,786,840,439)
-32.08%
AMAZON.COM INC
AMZN US
$7,525,326,878
($3,474,579,452)
-46.17%
COINBASE GLOBAL INC
COIN US
$2,353,269,830
($2,494,381,916)
-106.00%
PALO ALTO NETWORKS INC
PANW US
$3,909,426,575
($2,212,176,470)
-56.59%
ALPHABET INC A
GOOGL US
$5,148,272,210
($2,168,444,943)
-42.12%
BROADCOM INC
AVGO US
$3,841,993,656
($2,101,090,321)
-54.69%
CARVANA CO
CVNA US
$678,133,979
($1,904,597,342)
-280.86%
PALANTIR TECHNOLOGIES INC
PLTR US
$1,421,329,279
($1,834,542,689)
-129.07%
AIRBNB INC
ABNB US
$2,566,897,726
($1,628,070,882)
-63.43%
ADVANCED MICRO DEVICES
AMD US
$3,160,088,518
($1,601,446,672)
-50.68%
UPSTART HOLDINGS INC
UPST US
$632,905,133
($1,501,397,581)
-237.22%
ALPHABET INC - C
GOOG US
$3,475,297,769
($1,472,655,092)
-42.37%
NETFLIX INC
NFLX US
$3,256,464,870
($1,376,558,990)
-42.27%
CARNIVAL CORP
CCL US
$1,482,559,146
($1,317,615,233)
-88.87%
SUPER MICRO COMPUTER INC
SMCI US
$762,550,581
($1,244,002,352)
-163.14%
ROYAL CARIBBEAN CRUISES
RCL US
$1,508,527,906
($1,192,694,501)
-79.06%
Short sellers underperformed in July with a -5.2% return versus the S&P 500 +3.1%, Nasdaq +4.1% and the Russell 3000 +3.5%. This underperformance did not broadly squeeze short sellers out of their positions but there were several names that had large losses and resulting squeeze related short covering such as CVNA, RIVN, QS, ZION, RIOT & BYND.
In July, we saw total short interest climb by $69 billion to $1.07 trillion of total short interest. The increase in short interest was made up of $17 billion of increased short selling coupled with a $52 billion increase in the value of shares shorted. Short sellers were actively shorting into a rallying stock market.
U.S.\Can July Short Interest ($mm's)
7/31/23 Short Interest
Change Short Interest
Change Shs Shorted
Change MTM
Communication Services
$74,686
$6,941
$3,350
$3,591
Consumer Discretionary
$177,338
$10,824
($1,528)
$12,352
Consumer Staples
$48,428
$3,015
$2,077
$938
Energy
$71,056
$6,302
$1,381
$4,921
Financials
$137,070
$12,613
$961
$11,652
Health Care
$126,120
$1,495
$580
$915
Industrials
$120,161
$5,116
$272
$4,845
Information Technology
$207,786
$17,385
$8,768
$8,617
Materials
$40,122
$2,685
$769
$1,916
Misc. (SPACs)
$67
$10
$2
$8
Real Estate
$41,292
$1,612
($119)
$1,731
Utilities
$22,961
$956
$601
$355
Grand Total
$1,067,087
$68,955
$17,113
$51,842
Increasing their exposure while incurring losses tells us two things: shorts were looking for the rally to stumble and\or hedge funds were increasing their leverage and building up both their long and short books in an attempt to play catch up on the returns they missed in the first two quarters of the year when they were generally under-invested.
The largest increase in short selling occurred in the Information Technology, Communication Services and Consumer Staples sectors while we saw short covering in the Consumer Discretionary and Real Estate sectors.
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