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RH Shorts Lose Half Their 2019 Profit After Sales-Fueled Surge

RH Shorts Lose Half Their 2019 Profit After Sales-Fueled Surge

(Bloomberg) -- Short sellers in shares of RH lost half of this year’s profits after the company, formerly known as Restoration Hardware, posted first-quarter results that topped expectations and boosted its forecast. The stock rose the most in a year on almost seven times average daily volume.

RH short sellers had been ahead $163 million in year-to-date, mark-to-market gains before Thursday’s price move, according to research from S3 Partners. The 16% spike Thursday cost short sellers $67 million in mark-to-market losses, eating away over half of their profits, the research shows. They are now up only $76 million for the year, or 9.5%. Short sellers have been trimming their exposure to the company in 2019, covering 2 million of shares that had been shorted, a decline of 28%.

RH Shorts Lose Half Their 2019 Profit After Sales-Fueled Surge

--With assistance from Janet Freund.

To contact the reporter on this story: Carolina Wilson in New York City at cwilson166@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Scott Schnipper

©2019 Bloomberg L.P.