Overall short sellers paid $1.97 billion in stock borrow fees in the second quarter of 2022 (calculated daily borrow cost using S3’s daily offer rate and daily shares shorted numbers) versus $1.69 billion in the first quarter.
Traditional Short Interest versus S3 Short Interest Stocks with over $50 million of short interest with the largest decrease in SI % Float were: Samsara Inc (IOT) 45.92% to 17.85% GoGo Inc (GOGO) 27.60% to 10.72% Warner Bros Discovery (WBD) 23.33% to 2.81%) iStar Inc (STAR) 27.41% to 8.27% and Gitlab Inc (GTLB) 31.60% to 15.33%. Stocks with over $50 million of short interest with the largest increase in SI % Float were: Veru Inc (VERU) 4.48% to 33.20% SpringWorks Therapeutics (SWTX) 13.55% to 36.09% Adicet Bio (ACET) 4.47% to 26.02%) WeWork Inc (WE) 16.65% to 37.21% and Coinbase Global (COIN) 4.24% to 21.94%. (SPACs) down -2.73% and Communication Services down -0.81%. And only two sectors with larger than average decreases with Misc. There were two sectors with larger than average increases with Health Care up +0.39% and Financials up +0.37%. The S3 SI % Float, which includes the synthetic long shares created by every short sale in the denominator, rose slightly, + 1 bp, over the quarter, from 4.43% to 4.42%.Īlthough the overall market did not have a change in SI % Float we do see particular sectors or stocks that did have increases or decreases in the second quarter. Market wide Short Interest as a % of Float remained steady in the second quarter with SI % Float staying at 4.90%. Short exposure continues to be concentrated in several sectors: Information Technology ($180 billion), Consumer Discretionary ($147 billion) and Health Care ($125 billion). Only two sectors had an increase in short exposure in the second quarter, short interest in the Utilities sector was up +$815 million and the Consumer Discretionary sector was up +$748illion. Both Information Technology and Consumer Discretionary were two of the three sectors with the largest decreases in the first quarter of 2022 as well. The sectors with the largest decrease in short exposure were Information Technology (-$40.7 billion) and Consumer Discretionary (-$32.7 billion). In the first quarter, we saw short sellers replenish 61% of mark-to-market declines but only 41% of second quarter mark-to-market declines. Short sellers increased the amount of shares shorted to offset the decrease in the value of their short positions as stock prices declined, but for the second quarter in a row additional short selling did not offset the total decline in market value of the shorted securities. The $132.3 billion decrease was made up of -$224.0 billion in shorted share price decreases, which was partially offset by +$91.7 billion of increased short selling. The decrease in short interest was due to a down-trending market in the first quarter (S&P 500 down -16.45%, Nasdaq down -22.44% and Russell 3000 down -17.03%).
Short interest in the domestic market decreased by -$132.3 billion, or -12.3%, to $943 billion in the second quarter of 2022.
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