Daily Management Review

Analysts estimate short-selling gains in January at $114B


Companies specialising in short-selling stocks have earned $114bn since the start of the year, an 11.6% increase on the full year last year. The most lucrative short-selling bets on the stock market were bets against electric car maker Tesla and video service Netflix, analysts calculated.

Daniel Foster
Daniel Foster
Profits from short-selling shares since the start of 2022 rose to $114bn (as of the close of trading on Friday, January 21). It surpassed the figure for all of 2021, analysts at S3 Partners, a securities market forecasting firm, calculated. The most lucrative bets by short sellers were against Tesla and Netflix, whose shares lost 12% and 35% respectively in January, CNBC reports citing analysts. 

The most profitable short bet in January was against Elon Musk's Tesla, with its securities down almost 12%. According to S3 Partners, short sellers betting against the electric car maker made $2.3 billion in profit as of Friday, January 21. Traders who bet against the streaming video service Netflix earned an estimated $1.6 billion, according to S3 Partners. The streaming giant's stock fell 35% after the company gave an extremely cautious forecast for subscriber growth.

Bearish bets by traders were winning amid a sell-off in the US stock market. The S&P 500 Index was down more than 10% from its all-time high on Monday, January 24. The Nasdaq Composite index (high-tech companies) was down about 12% in January and is now almost 15% below its all-time high. On Monday, January 24 this index closed on the plus side after losing 4.9% in a stunning reversal.

source: cnbc.com