While US stock markets did well last year, short sellers had another difficult year in 2024.
• US stock markets with strong performance in 2024
• Difficult year for short sellers
• These short sales were worth it
Stock markets have been strong – difficult year for short sellers
The market-wide US index S&P 500 recorded a gain of around 23 percent last year, while the NASDAQ Composite gained around 29 percent and the US leading index Dow Jones recorded a price increase of around 13 percent. Given this positive development, short sellers had another difficult year in 2024.
As Seeking Alpha reports, citing data from S3 Partners, short sellers recorded a total of $180.9 billion in market value losses relative to market value in 2024. However, short sellers were able to improve on their mark-to-market losses from the previous year, after they stood at $194.9 billion in 2023.
Profitable and unprofitable short selling relatively balanced
As data from S3 Partners shows, shorts in the information technology and communications services sectors performed the worst as tech outperformed most other sectors last year, while they made small gains in the materials and healthcare sectors.
Meanwhile, “the number of profitable and unprofitable short sales […] relatively balanced,” explains Ihor Dusaniwsky, Managing Director for Predictive Analytics at S3 Partners. 47.5 percent of all short sales achieved positive returns, while 46.3 percent recorded losses and 6.2 percent of short sales had no market value. “But the Big bets were unfortunately on the losing side, as only 32.7% of all dollars shorted were up, while 67.2% were down (0.1 % of dollars shorted had no P\L),” said Dusaniwsky.
Which short sales were worth it – and which ones weren’t
As Seeking Alpha reports, $394 billion worth of profitable short selling was made in 2024, with market value gains of $99.5 billion. For short sellers, bets against chip manufacturer Intel paid off the most last year. The company’s shares collapsed by around 60 percent in 2024. In second place were short sales against the US pharmaceutical company Moderna, whose securities lost around 58 percent of their value in 2024. In third place is Advanced Micro Devices (AMD), whose shares fell by around 18 percent last year. The top ten stocks that made short sellers the biggest gains last year also include Pinduoduo, Microchip Tech, Albemarle, Adobe, Rivian, SolarEdge and Enphase Energy.
Meanwhile, there was $808 billion in unprofitable short selling last year, with market value losses of $280.4 billion. In the unprofitable trades, the short sellers lost the most money with the chip giant NVIDIA, as NVIDIA shares gained around 171 percent in 2024. Electric car maker Tesla came in second, whose shares increased by around 63 percent last year. In third place was Apple, whose shares gained around 30 percent in value in 2024. The ten stocks on which short sellers lost the most money last year also include Broadcom, Meta Platforms, MicroStrategy, Amazon, AppLovin, Palantir and Netflix.
Editorial team finanzen.net
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