Shorting US regional banks and vaccine makers is one of the few highlights of the bears in 2023.
The Zhitong Finance App learned that shorting US regional banks and vaccine manufacturers is one of the few highlights of the bears in 2023. Due to the sharp rise in the US stock market last year, bears experienced their biggest cumulative loss since the worst period of the epidemic.
According to S3 Partners LLC, the collapse of First Republic Bank (FRCB.US) made the stock the most profitable bearish bet in 2023, with a book profit of $1.6 billion. Vaccine producer Moderna (MRNA.US), which plummeted 45% in 2023, came in second place, earning $1.2 billion for bears betting on falling stocks.
Regional banks, healthcare stocks are the best bearish bets in 2023
These results highlight some of the key events affecting the market in 2023, including the regional banking crisis that broke out in spring and the decline in demand for COVID-19 vaccines.
However, bears that shorted big tech companies have suffered significant losses. Big tech stocks surged in 2023 and led a full rebound in the US stock market after the market was hit the previous year.
Overall, the bears lost close to $1950 billion in book losses at the end of 2023, offsetting about two-thirds of the nearly $300 billion in revenue they received during the 2022 market crash, according to S3 data. Bears accumulated losses of about US$142 billion in 2021 and US$242 billion in 2020.
Tesla (TSLA.US) bears lost the most. The electric car maker's stock price almost doubled in 2023, causing the bears to lose $12.2 billion in book losses. Next is Nvidia (NVDA.US), which cost bears $11.2 billion, followed by the so-called “Big Seven”, semiconductor companies, and cryptocurrency trading platform Coinbase (COIN.US).
The “Big Seven” caused heavy losses to the bears
Ihor Dusaniwsky, managing director of S3's predictive analytics division, said on Thursday that since bears tend to invest the most dollars into stocks that have increased the most in the previous year, 73% of every dollar shorted has generated negative returns.
But he said the number of stocks that made bears profit or lose money last year was more balanced.
“Surprisingly, there are almost as many profitable stocks as shorting loss-making stocks,” Dusaniwsky said, adding that in communications services, basic consumer goods, healthcare, materials, and utilities stocks, there are actually more profitable stocks by shorting than loss-making stocks.