Bearish bets against the top 10 most-shorted shares in the United States have accumulated $4.5 billion in paper losses as of Wednesday, Bloomberg reported.
- Ortex Co-founder Peter Hillerberg said the majority of short-sellers are okay to sit on significant paper losses, in hopes that this won’t be realized.
- “This now looks like a flawed strategy,” Hillerberg said in an email.
- Paper losses of short-sellers include $2.75 billion for AMC Entertainment Holdings Inc. after shares surged 95%.
- Adding Gamestop Corp. and Bed Bath & Beyond Inc., unrealized losses amount to some $4 billion.
- Analysts at Goldman’s prime-broker unit noted that highly shorted stocks and high retail sentiment names underperformed in the past two months.
- This led analysts to believe managers are more comfortable utilizing single names to express directional views or adjust exposures.
- Short positions against single shares climbed for the ninth consecutive week to hover one-year highs versus overall equity holdings.
AMC: NYSE is down 5.84%; while GME: NYSE is down 5.02% premarket.