By Carolina Mandl
NEW YORK (Reuters) - Investors who bet against U.S. and Canadian stocks had paper losses of $194.9 billion last year following a sharp market rally, data provider S3 Partners Research said on Thursday.
The firm said 2023 was an “exceedingly difficult year” for short sellers, after the Nasdaq Composite Index surged 43.4% and the S&P 500 rose 24.2%. Investors who short a stock are betting that its price will fall.
Bets against Tesla (NASDAQ:TSLA), Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) were the six biggest losers for short sellers, S3 said.
Overall, investors’ total short position was $957 billion, S3 said.
Still, some investors were able to make money betting against stocks, especially during the banking crisis that rocked markets last March.
Shares of First Republic Bank (OTC:FRCB), which was eventually acquired by JPMorgan Chase (NYSE:JPM), were the most profitable short last year, generating a profit of 840%, or $1.6 billion. Failed lenders SVB Financial Group and Signature Bank (OTC:SBNY) were also the third- and 11th-most profitable bets in 2023, respectively.
Reuters reported in April that early short sellers in troubled banks were in the small minority.