US & Canada Q1 2023 Short P/L Recap
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
U.S.\Canada short sellers had a second consecutive unprofitable quarter, down -$62.6 billion on an average short interest of $940 billion, down -6.66% for the quarter. Short side performance dovetailed with the market rally we saw in the first quarter with the S&P 500 up +7.03%, Nasdaq up +16.77% and Russell 3000 up +6.75%.
U.S.\Canada Quarterly Short P\L
Average Short Interest
Quarter MTM P\L
P\L %
1st Quarter 2022
$1,079,557,012,441
$83,648,230,219
7.75%
2nd Quarter 2022
$1,001,951,314,187
$225,112,577,421
22.47%
3rd Quarter 2022
$981,918,564,990
$40,759,431,706
4.15%
4th Quarter 2022
$938,663,537,335
($43,507,347,651)
-4.64%
1st Quarter 2023
$939,533,214,712
($62,578,537,883)
-6.66%
Short performance varied greatly by sector, with eight out of our twelve sectors having negative returns. Energy, Financials, Health Care and Utilities sectors were slightly profitable on the short side while Information Technology, Consumer Discretionary and Communication services were the big losers on the short side.
U.S.\Canada Sector 1st Qtr. MTM P\L
1st Qtr. Avg Short Interest
1st Qtr. MTM P\L
P\L %
Communication Services
$64,967,987,943
($9,359,482,140)
-14.41%
Consumer Discretionary
$145,245,340,437
($21,280,058,992)
-14.65%
Consumer Staples
$46,568,309,364
($913,374,185)
-1.96%
Energy
$71,158,548,253
$2,897,854,682
4.07%
Financials
$127,095,052,466
$2,895,653,673
2.28%
Health Care
$120,755,478,953
$1,419,328,196
1.18%
Industrials
$104,202,964,088
($6,294,136,484)
-6.04%
Information Technology
$159,880,994,132
($29,812,606,126)
-18.65%
Materials
$41,053,302,274
($2,331,941,609)
-5.68%
Misc. (SPACs)
$182,211,789
($1,881,439)
-1.03%
Real Estate
$34,994,934,063
($153,288,965)
-0.44%
Utilities
$23,428,090,950
$355,395,509
1.52%
Total 1st Qtr. MTM P\L
$939,533,214,711
($62,578,537,883)
-6.66%
Almost two-thirds, 64%, of every dollar shorted in the first quarter was an unprofitable trade. Following market consensus did not increase the chances for short side profitability with fifteen out of the twenty largest shorts, in dollar terms, producing outsized negative returns of-28.94% versus a +4.53% return for the five profitable trades.
The most profitable short side trades for the quarter were mostly financial and health care stocks:
Most Profitable 1st Qtr. Shorts
Ticker
Avg. Short Interest
MTM P\L
P\L %
SVB FINANCIAL GROUP
SIVB US
$876,053,459
$1,059,723,087
120.97%
FIRST REP BANK/CA
FRC US
$466,980,129
$704,519,959
150.87%
SIGNATURE BANK NY
SBNY US
$417,813,869
$642,986,436
153.89%
CHARLES SCHWAB CORP
SCHW US
$1,035,292,434
$418,940,269
40.47%
PFIZER INC
PFE US
$1,730,664,739
$403,881,103
23.34%
LUMEN TECHNOLOGIES INC
LUMN US
$589,875,906
$374,323,637
63.46%
MODERNA INC
MRNA US
$2,434,533,088
$371,347,329
15.25%
MEDICAL PROPS TRUST
MPW US
$1,203,845,659
$347,359,470
28.85%
UNITEDHEALTH GRP
UNH US
$2,550,913,026
$329,671,229
12.92%
SILVERGATE CAPITAL CORP
SI US
$219,644,454
$309,220,052
140.78%
SIRIUS XM HLDGS
SIRI US
$824,659,643
$304,512,994
36.93%
BANK OF AMERICA
BAC US
$1,990,282,786
$297,315,447
14.94%
CVS HEALTH CORP
CVS US
$1,432,860,918
$291,362,791
20.33%
TORONTO-DOMINION BANK
TD CN
$3,671,663,413
$290,078,868
7.90%
ENPHASE ENERGY
ENPH US
$1,223,220,395
$289,873,379
23.70%
IBM CORP
IBM US
$3,692,985,500
$271,536,720
7.35%
PINDUODUO INC ADR
PDD US
$2,553,755,952
$237,779,999
9.31%
BILL.COM HOLDINGS INC
BILL US
$809,497,075
$227,646,151
28.12%
CONOCOPHILLIPS
COP US
$1,241,009,607
$225,297,910
18.15%
CHEVRON CORP
CVX US
$2,460,620,344
$221,637,558
9.01%
And the least profitable short side trades for the quarter were mostly mega cap and tech stocks:
Least Profitable 1st Qtr. Shorts
Ticker
Avg. Short Interest
MTM P\L
P\L %
TESLA INC
TSLA US
$14,780,397,288
($7,699,883,435)
-52.10%
NVIDIA CORP
NVDA US
$8,026,177,413
($4,997,689,652)
-62.27%
APPLE INC
AAPL US
$16,549,478,716
($4,023,921,999)
-24.31%
META PLATFORMS INC
META US
$4,814,773,190
($2,463,084,953)
-51.16%
MICROSOFT CORP
MSFT US
$9,150,605,747
($1,713,861,708)
-18.73%
COINBASE GLOBAL INC
COIN US
$2,191,062,827
($1,364,434,210)
-62.27%
AMAZON.COM INC
AMZN US
$6,185,563,106
($1,316,612,657)
-21.29%
PALO ALTO NETWORKS INC
PANW US
$3,234,496,507
($1,156,001,594)
-35.74%
ADVANCED MICRO DEVICES
AMD US
$2,617,707,050
($1,094,714,651)
-41.82%
ALIBABA GROUP ADR
BABA US
$5,815,060,766
($1,003,578,134)
-17.26%
SEA LTD ADR
SE US
$1,602,458,723
($824,769,460)
-51.47%
AIRBNB INC
ABNB US
$2,171,479,432
($818,423,445)
-37.69%
SALESFORCE.COM INC
CRM US
$1,746,575,381
($681,607,316)
-39.03%
ALPHABET INC - A
GOOGL US
$3,948,068,529
($639,377,781)
-16.19%
MICROSTRATEGY INC
MSTR US
$790,045,879
($567,997,541)
-71.89%
WARNER BROS DISCOVERY INC
WBD US
$1,071,613,080
($551,154,570)
-51.43%
VISA INC
V US
$7,177,881,483
($545,941,325)
-7.61%
NETFLIX INC
NFLX US
$2,932,255,556
($520,361,960)
-17.75%
TAIWAN SEMICONDUCTOR ADR
TSM US
$2,299,540,885
($499,625,102)
-21.73%
SHOPIFY INC
SHOP US
$1,794,875,472
($498,700,539)
-27.78%
Diving deeper into the numbers we see large profitability variations by sub-industry. Regional Banks, Biotechnology and Oil & Gas Exploration & Production and Diversified Banks were the most profitable sub-industries to short:
Most Profitable 1st Qtr. Sub-Industries
Avg. Short Interest
MTM P\L
P\L %
Regional Banks
$13,418,784,564
$4,270,629,949
31.83%
Biotechnology
$40,116,898,130
$2,499,657,973
6.23%
Oil & Gas Exploration & Production
$23,625,324,864
$2,099,306,454
8.89%
Diversified Banks
$33,239,706,189
$1,765,554,215
5.31%
Managed Health Care
$6,473,345,406
$700,547,450
10.82%
Pharmaceuticals
$21,254,137,074
$561,647,735
2.64%
Office REITs
$2,631,787,738
$526,956,245
20.02%
Integrated Oil & Gas
$15,951,007,711
$518,868,113
3.25%
Investment Banking & Brokerage
$7,561,240,829
$397,233,996
5.25%
Oil & Gas Equipment & Services
$4,648,589,906
$386,447,084
8.31%
Semiconductors, Automobile Manufactures, and Application Software were the least profitable sub-industries to short:
Least Profitable 1st Qtr. Sub-Industries
Avg. Short Interest
MTM P\L
P\L %
Semiconductors
$39,892,095,850
($11,534,499,681)
-28.91%
Automobile Manufacturers
$25,001,183,610
($8,725,360,721)
-34.90%
Application Software
$32,802,051,793
($5,551,603,895)
-16.92%
Technology Hardware Storage & Peripherals
$22,429,210,049
($4,438,969,463)
-19.79%
Systems Software
$23,928,063,745
($4,288,885,905)
-17.92%
Interactive Media & Services
$18,777,006,477
($4,171,476,906)
-22.22%
Movies & Entertainment
$11,352,926,543
($2,788,205,354)
-24.56%
Broadline Retail
$23,007,418,803
($2,593,675,250)
-11.27%
Hotels Resorts & Cruise Lines
$11,574,342,242
($2,272,918,878)
-19.64%
Internet Services & Infrastructure
$9,115,155,440
($1,816,889,681)
-19.93%
Short side winners and losers in the most profitably shorted sub-industries:
The regional bank “contagion” created numerous shorting opportunities with 95% of every dollar shorted in the Regional Banking sector being profitable.
Regional Banks
Ticker
Avg Short Interest
MTM P\L
P\L %
FIRST REP BANK/CA
FRC US
$466,980,129
$704,519,959
150.87%
SIGNATURE BANK NY
SBNY US
$417,813,869
$642,986,436
153.89%
SILVERGATE CAPITAL CORP
SI US
$219,644,454
$309,220,052
140.78%
FIRST HORIZON NATL
FHN US
$632,726,613
$184,150,212
29.10%
TRUIST FINANCIAL CORP
TFC US
$634,587,288
$139,648,785
22.01%
HUNTINGTON BANCSHARES
HBAN US
$621,590,688
$130,507,556
21.00%
ZIONS BANCORP
ZION US
$189,160,571
$96,583,406
51.06%
CITIZENS FINL GROUP
CFG US
$434,233,977
$95,666,711
22.03%
BANK OF HAWAII CORP
BOH US
$205,538,727
$90,298,871
43.93%
REGIONS FINANCIAL CO
RF US
$518,454,973
$86,319,365
16.65%
PACWEST BANCORP
PACW US
$121,203,495
$80,948,149
66.79%
COLUMBIA BANKING SYS
COLB US
$260,884,846
$60,402,993
23.15%
M&T BANK CORP
MTB US
$411,656,291
$60,332,443
14.66%
BANKUNITED INC
BKU US
$150,743,822
$57,344,272
38.04%
BANK OZK
OZK US
$299,910,567
$53,086,962
17.70%
N.Y. COMM BANCORP
NYCB US
$128,549,693
($23,826,119)
-18.53%
Shorting the Biotech sector was a crapshoot with only 51% of shorted stocks having positive returns, but shorts with large market backing (larger short interest) outperformed with two-thirds of every shorted dollar being profitable.
Biotechnology
Ticker
Avg Short Interest
MTM P\L
P\L %
MODERNA INC
MRNA US
$2,434,533,088
$371,347,329
15.25%
ALNYLAM PHARMA
ALNY US
$1,107,352,215
$198,128,069
17.89%
AMGEN INC
AMGN US
$1,968,621,322
$164,017,713
8.33%
HALOZYME THERAPEUTICS
HALO US
$352,887,000
$138,645,722
39.29%
BEAM THERAPEUTICS INC
BEAM US
$496,748,003
$108,304,300
21.80%
CYTOKINETICS INC
CYTK US
$404,799,201
$104,578,796
25.83%
NOVAVAX INC
NVAX US
$299,599,923
$103,828,348
34.66%
SAREPTA THERAPEUTICS
SRPT US
$855,893,871
($100,219,838)
-11.71%
NATERA INC
NTRA US
$314,604,972
($108,204,722)
-34.39%
REGENERON PHARMA
REGN US
$1,004,697,127
($129,552,440)
-12.89%
APELLIS PHARMACEUTICALS INC
APLS US
$587,032,427
($131,591,983)
-22.42%
BRIDGEBIO PHARMA INC
BBIO US
$199,710,008
($156,507,925)
-78.37%
SEAGEN INC
SGEN US
$413,867,688
($206,490,276)
-49.89%
EXACT SCIENCES CORP
EXAS US
$761,028,240
($217,367,692)
-28.56%
Crude prices not being able to stay above the $80/barrel level affected the larger shorts I the sector more than the less shorted stocks. Only 50% of every shorted stock was profitable but 82% of every dollar shorted was profitable in the sector. We saw $1.2 billion of increased short selling in the sector during the first quarter as short sellers backed up their bets in a weakening sector.
Oil & Gas Exploration & Prod
Ticker
Avg Short Interest
MTM P\L
P\L %
CONOCOPHILLIPS
COP US
$1,241,009,607
$225,297,910
18.15%
CHESAPEAKE ENERGY CORP
CHK US
$722,384,693
$164,052,643
22.71%
TEXAS PACIFIC LAND CORP
TPL US
$482,937,738
$158,083,506
32.73%
DEVON ENERGY CORP
DVN US
$771,237,494
$146,686,620
19.02%
ANTERO RESOURCES
AR US
$478,477,114
$144,518,534
30.20%
PIONEER NAT RES CO
PXD US
$1,027,465,975
$103,274,045
10.05%
EOG RESOURCES
EOG US
$811,118,571
$102,291,945
12.61%
APA CORP
APA US
$410,098,013
$100,781,570
24.57%
PERMIAN RESOURCES CORP
PR US
$383,664,139
($40,787,057)
-10.63%
Only 31% of shorted Diversified Bank stocks were profitable but the outsized short side profits in SVB Financial Group (SIVB US) skewed the sub-industry into net profitability.
Diversified Banks
Ticker
Avg Short Interest
MTM P\L
P\L %
SVB FINANCIAL GROUP
SIVB US
$876,053,459
$1,059,723,087
120.97%
BANK OF AMERICA
BAC US
$1,990,282,786
$297,315,447
14.94%
TORONTO-DOMINION BANK
TD CN
$3,671,663,413
$290,078,868
7.90%
PNC FINANCIAL SERVICES GROUP
PNC US
$740,499,498
$149,320,619
20.16%
WELLS FARGO & CO
WFC US
$1,142,847,443
$141,513,797
12.38%
KEYCORP
KEY US
$378,323,868
$120,183,433
31.77%
BANK OF NOVA SCOTIA
BNS US
$1,325,901,134
($104,401,588)
-7.87%
96% of every dollar shorted in the Managed Health Care sector were profitable on the short side with only Progyny Inc (PGNY US) sporting red P\L numbers.
Managed Health Care
Ticker
Avg Short Interest
MTM P\L
P\L %
UNITEDHEALTH GRP
UNH US
$2,550,913,026
$329,671,229
12.92%
CENTENE CORP
CNC US
$430,122,937
$114,644,802
26.65%
PROGYNY INC
PGNY US
$216,483,044
($5,156,753)
-2.38%
Short side winners and losers in the least profitably shorted sub-industries:
The rally in semiconductor stocks, led by Nvidia Corp (NVDA US) saw 11% of shorted shares bought to cover the first quarter in response to 96% of every dollar shorted being an unprofitable trade and no short position with over $100 million in quarter mark-to-market profitable.
Semiconductors
Ticker
Avg Short Interest
MTM P\L
P\L %
WOLFSPEED INC
WOLF US
$1,117,604,498
$66,866,725
5.98%
MARVELL TECHNOLOGY INC
MRVL US
$766,208,852
($110,480,599)
-14.42%
UTD MICROELECT ADR
UMC US
$426,075,867
($120,335,456)
-28.24%
ALLEGRO MICROSYSTEMS INC
ALGM US
$272,649,728
($123,878,088)
-45.43%
NXP SEMICONDUCTORS NV
NXPI US
$1,048,783,952
($156,947,198)
-14.96%
ANALOG DEVICES INC
ADI US
$969,727,797
($170,355,904)
-17.57%
LATTICE SEMICOND
LSCC US
$500,078,907
($189,636,921)
-37.92%
MICROCHIP TECH INC
MCHP US
$1,299,954,946
($191,065,871)
-14.70%
QUALCOMM INC
QCOM US
$1,336,676,643
($238,127,753)
-17.81%
GLOBALFOUNDRIES INC
GFS US
$791,745,519
($241,202,349)
-30.46%
FIRST SOLAR INC
FSLR US
$743,367,876
($253,907,682)
-34.16%
MICRON TECHNOLOGY
MU US
$1,313,534,394
($296,522,339)
-22.57%
TEXAS INSTRUMENTS
TXN US
$3,165,739,251
($382,555,378)
-12.08%
MONOLITHIC POWER SYSTEMS
MPWR US
$1,256,154,469
($417,506,306)
-33.24%
ON SEMICONDUCTOR
ON US
$1,719,218,683
($422,217,680)
-24.56%
BROADCOM INC
AVGO US
$3,189,296,309
($437,271,707)
-13.71%
INTEL CORP
INTC US
$2,076,617,438
($466,069,788)
-22.44%
TAIWAN SEMICONDUCTOR ADR
TSM US
$2,299,540,885
($499,625,102)
-21.73%
ADVANCED MICRO DEVICES
AMD US
$2,617,707,050
($1,094,714,651)
-41.82%
NVIDIA CORP
NVDA US
$8,026,177,413
($4,997,689,652)
-62.27%
Two thirds of every shorted Auto Manufacturers stock was an unprofitable trade and 91% of every dollar shorted was a loser as Tesla’s (TSLA US) first quarter rebound hit short sellers with a -52% return for the quarter.
Automobile Manufacturers
Ticker
Avg Short Interest
MTM P\L
P\L %
RIVIAN AUTOMOTIVE INC
RIVN US
$799,689,355
$57,933,281
7.24%
FISKER INC
FSR US
$419,908,299
$53,722,251
12.79%
XPENG INC ADR
XPEV US
$490,656,774
($91,894,446)
-18.73%
FORD MOTOR CO
F US
$1,536,837,304
($93,642,089)
-6.09%
FERRARI NV
RACE US
$494,044,557
($107,180,671)
-21.69%
LI AUTO INC ADR
LI US
$757,986,764
($146,781,280)
-19.36%
LUCID GROUP INC
LCID US
$1,274,948,579
($356,620,345)
-27.97%
TESLA INC
TSLA US
$14,780,397,288
($7,699,883,435)
-52.10%
Bitcoin’s 71% first quarter rally provided a tailwind for Application Software stocks like MicroStrategy Inc (MSTR US), Marathon Digital Holdings Inc (MARA US) and Riot Blockchain Inc (RIOT US) and a long side rotation into A.I. stocks helped buoy stock prices in Salesforce.com Inc (CRM US), C3.I Inc (AI US) and Atlassian Corp (TEAM US).
Application Software
Ticker
Avg Short Interest
MTM P\L
P\L %
BILL.COM HOLDINGS INC
BILL US
$809,497,075
$227,646,151
28.12%
SYNOPSYS INC
SNPS US
$608,509,868
($113,117,183)
-18.59%
UNITY SOFTWARE INC
U US
$918,271,999
($117,353,192)
-12.78%
CERIDIAN HCM HOLDING INC
CDAY US
$782,567,202
($122,987,406)
-15.72%
INTUIT INC
INTU US
$1,032,250,875
($136,972,081)
-13.27%
CADENCE DESIGN SYS
CDNS US
$626,688,832
($156,400,516)
-24.96%
WORKDAY INC
WDAY US
$800,219,767
($170,713,556)
-21.33%
ADOBE SYSTEMS INC
ADBE US
$1,734,978,091
($211,278,296)
-12.18%
RIOT BLOCKCHAIN INC
RIOT US
$197,278,489
($212,533,441)
-107.73%
HUBSPOT INC
HUBS US
$566,360,507
($218,815,244)
-38.64%
PALANTIR TECHNOLOGIES INC
PLTR US
$1,021,819,009
($219,693,673)
-21.50%
MARATHON DIGITAL HLDGS INC
MARA US
$320,234,465
($268,382,481)
-83.81%
ATLASSIAN CORP
TEAM US
$923,678,397
($292,606,450)
-31.68%
C3.AI INC
AI US
$379,046,290
($360,023,751)
-94.98%
MICROSTRATEGY INC
MSTR US
$790,045,879
($567,997,541)
-71.89%
SALESFORCE.COM INC
CRM US
$1,746,575,381
($681,607,316)
-39.03%
Apple Inc (AAPL US) made up 91% of the first quarter mark-to-market losses in the Technology Hardware & Peripherals sector and we saw $2.9 billion of short covering in response to those losses.
Tech Hardware Storage & Peripherals
Ticker
Avg Short Interest
MTM P\L
P\L %
PURE STORAGE INC
PSTG US
$610,387,303
$81,823,818
13.41%
SUPER MICRO COMPUTER INC
SMCI US
$433,244,516
($120,428,785)
-27.80%
SEAGATE TECHNOLOGY HOLDINGS
STX US
$622,725,718
($127,578,183)
-20.49%
APPLE INC
AAPL US
$16,549,478,716
($4,023,921,999)
-24.31%
Microsoft Corp (MSFT US) and Palo Alto Networks Inc (PANW US) are the two largest shorts in the sector and also the least profitable shorts in the sector. We saw an 8% decrease in total shorted shares in the sector as short sellers rotated into the Automobile, Banking and Telecomm sectors.
Systems Software
Ticker
Avg Short Interest
MTM P\L
P\L %
GITLAB INC
GTLB US
$391,208,426
$74,233,474
18.98%
ORACLE CORP
ORCL US
$1,244,182,085
($152,386,285)
-12.25%
UIPATH INC
PATH US
$452,669,290
($153,332,032)
-33.87%
SERVICENOW INC
NOW US
$1,452,278,343
($227,503,839)
-15.67%
FORTINET INC
FTNT US
$786,769,743
($241,238,850)
-30.66%
CROWDSTRIKE HOLDINGS
CRWD US
$916,610,992
($255,940,174)
-27.92%
PALO ALTO NETWORKS INC
PANW US
$3,234,496,507
($1,156,001,594)
-35.74%
MICROSOFT CORP
MSFT US
$9,150,605,747
($1,713,861,708)
-18.73%
Our Blacklight SaaS platform and Black App provides an up-to-date view of short selling and short covering on an equity, sector, index, or country-wide basis allowing investors\traders to better manage their existing long and short positions.
The Black MaP and Black App products provide a total view of long and short positioning in the market with a breakdown between Active\Passive long investors, 24 Fund type entities, over 50k securities globally across 108 countries and data from 58 regulatory exchanges.
