Short Sellers Made Over $50 Billion During Coronavirus Sell-Off

(Bloomberg) -- Short sellers added to their U.S. positions during the recent coronavirus-related sell-off, making more than $50 billion in profits over seven trading days, according to data from financial analytics firm S3 Partners.

There was nearly $15 billion of additional short selling between Feb. 24 and March 3, bringing total domestic equity short interest to $848 billion. Those short sellers made $51.3 billion in mark-to-market profits, S3 said in a report published Wednesday. The S&P 500 Index fell 10% over the same period.

The most profitable short since Feb. 24 was Tesla Inc., “a very familiar name for short sellers,” the firm said. Investors who bet Tesla would decline made $1.1 billion over the seven-day stretch, recouping some of their $9 billion in year-to-date losses, as shares fell 17%.

On a percentage basis, natural-gas producer Tellurian Inc. was the big winner for short sellers, generating a 111% return as shares plunged 76%.

“If today’s up-market is followed by several more days of positive stock price movement, we should see short covering activity in many stocks as short sellers realize recently earned mark-to-market gains,” S3 said. “A good portion of the $14.6 billion of recent short selling activity may have a short lifespan, but a profitable one if shorts cover in time.”

©2020 Bloomberg L.P.