On Thursday Eastern Time, data provider S3 Partners Research released data showing that investors shorting the US and Canadian stock markets suffered huge book losses of $19.9 billion as the US stock market surged last year.
North American stock market bears suffer a devastating loss of $1949 billion
Last year, the S&P 500 index in the United States rose a cumulative 24.2%, and the Nasdaq Composite Index surged 43.4%. This makes 2023 an extremely difficult year for short sellers.
According to S3 data, overall, investors had a total short position of $957 billion last year, with a book loss of up to $1949 billion.
By contrast, in 2022, with the Federal Reserve raising interest rates significantly, the S&P 500 index fell by a cumulative 19.44% for the year, and US stock bears made nearly $300 billion that year.
However, the losses of US stock bears last year were still lower than those of 2020. In 2020, because of the bet that the COVID-19 will lead to a sharp decline in US stocks, short positions in US stocks increased. However, the US government's fiscal stimulus and the Federal Reserve's loose monetary policy made the S&P 500 index gain 16.26% in that year, and short positions in US stocks suffered a loss of US $242 billion in that year.
Bears suffer the most losses on Tesla
S3 data shows that Tesla, Nvidia, Apple, Meta, Microsoft, and Amazon are the six companies that cause the biggest losses for short sellers. And these six companies are all among the "Magnificent Seven".
Specifically, Tesla bears suffered the most severe losses: the stock price of this electric vehicle manufacturer nearly doubled in 2023, causing bears to lose $12.2 billion on paper. Nvidia suffered a short loss of $11.2 billion, ranking second; Apple's bearish losses amounted to $7.3 billion; Meta's bearish losses amounted to $6.6 billion; Microsoft's bears lost $5.6 billion; Amazon's bears lost $4.9 billion. As Bitcoin prices rebounded significantly, Coinbase's stock price also surged in the second half of last year, causing bears to lose $4.2 billion last year, ranking seventh.
Regional banks and vaccine manufacturers have become a few highlights
Despite the overall heavy losses suffered by bears last year, some investors were still able to make money by shorting stocks, especially during the banking crisis that hit the market in March last year.
Last March, regional banks in the United States were hit by consecutive thunderstorms, and the stocks of First Republic Bank became the most profitable stocks for bears last year.
Last March, the stock price of First Republic Bank plummeted by over 88%, while bears earned over $1.6 billion in book profits from it. The First Republic Bank was ultimately acquired by JPMorgan Chase. The former parent companies of Silicon Valley Bank, SVB Financial Group and Signature Bank, which also declared bankruptcy, were also the third and eleventh most profitable short selling targets last year, respectively.
In addition, vaccine manufacturers are also one of the few bright spots among short sellers in 2023.
As the impact of the COVID-19 epidemic gradually faded, the plate experienced the largest cumulative decline since the worst period of the epidemic last year. Last year, the stock price of vaccine manufacturer Moderna plummeted by 45%, causing bears betting on the stock's decline to earn a book profit of $1.1 billion, making it the second profitable short selling target last year.