Short Sellers Suffer $175B Loss As Nvidia, Tesla And Meta Soar Against Doomsayers Expectations

Short sellers have faced losses of over $175 billion due to an unforeseen tech stock surge, Business Insider reports.

Driven by investor enthusiasm for AI, the tech sector witnessed a rally leading to $175.2 billion mark-to-market losses for short sellers this year, with July accounting for $53.5 billion. Data from S3 Partners indicates that only 30% of shorted stocks were profitable trades in 2023.

“US/Canada equity short sellers started out 2023 with large mark-to-market losses in January, followed by four months of profits, and now a second month of large losses,” stated S3 Partners.

Short selling, or “shorting”, is when investors borrow shares to sell them, hoping to buy them back cheaper later on. They do this expecting the stock’s price to drop and aim to earn a profit from that decrease. However, 2023 defied these predictions.

Factors like the release of OpenAI’s ChatGPT and hopes of a lenient Federal Reserve monetary policy have boosted tech stocks. The S&P 500 and Nasdaq 100 rose by 17% and 39% respectively this year. Nvidia NVDA, Meta META, and Tesla TSLA have been the least profitable shorts, with Nvidia standing out as a top pick for investors.

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