"Tesla, Let the Bubble Deflate" US Big Tech Short Selling Nears 1,300 Trillion Won

Largest Short Selling Volume Since April 2022
Meanwhile, Stocks Like Tesla and Apple Are on the Rise
Short Selling Losses Reach 155 Trillion Won, Causing 'Screams'

The scale of short selling betting on the decline of U.S. companies' stock prices reached $1 trillion (approximately 1292 trillion KRW) this month. Among this, the loss amount due to short selling this year has reached around $120 billion (approximately 155 trillion KRW).

The scale of short selling betting on the decline of U.S. companies' stock prices reached $1 trillion (approximately 1,292 trillion KRW) this month. Among this, losses from short selling this year have reached around $120 billion (approximately 155 trillion KRW).
Photo by AP·Yonhap News

On the 20th (local time), the U.S. daily Wall Street Journal (WSJ) reported, citing investment information firm S3 Partners, that the total amount of short selling in the U.S. stock market hit $1 trillion this month, the highest since April last year.

This is an increase from $863 billion (approximately 1115 trillion KRW) at the beginning of the year and corresponds to about 5% of all tradable shares. However, the S&P 500, a major index of the New York Stock Exchange, has risen 14.3% this year, including a 5% increase just this month.

Accordingly, based on market valuation, the scale of short selling losses this year is recorded at around $120 billion. Moreover, with the recent increase in bets on stock price declines, the short selling loss from the 1st to the 15th of this month alone reached $72 billion (approximately 93 trillion KRW).

Short Selling Focused on Big Tech Companies Like Tesla Leading Recent Stock Price Gains

Short selling is concentrated on big tech companies, including Tesla, which have recently been leading the rise in stock prices.
[Photo by Reuters·Yonhap News]

Short selling is an investment technique where stocks are borrowed and sold when a price decline is expected, then repurchased at a lower price to return the shares. Since hedge funds and institutional investors account for most short selling investments, WSJ explains that they are uneasy about the recent stock price rise.

It further explains that hedge funds, having missed the early-year rally, are increasing both their long (buy) and short (sell) positions to make up for it. Short selling is concentrated on big tech companies that have recently led stock price gains.

As of the 15th, the major companies' short selling amounts are Tesla ($23.55 billion, approximately 30.4 trillion KRW), Apple ($22.38 billion, approximately 28.9 trillion KRW), Microsoft ($16.53 billion, approximately 21.3 trillion KRW), Nvidia ($11.45 billion, approximately 14.8 trillion KRW), and Amazon ($9.64 billion, approximately 12.4 trillion KRW), in that order.

The short selling amount on Tesla surpassed Apple on the 8th, and the total short selling amount of these five stocks accounts for 3.3% of tradable shares, the highest ever. However, Tesla and Nvidia stock prices have risen about 120% and 200% respectively this year, and Apple, Microsoft, and Amazon stocks have also increased by at least 40%.

Additionally, WSJ added that Goldman Sachs' index, composed of the 50 stocks with the highest short selling ratio within the Russell 3000 Index, has risen more than 20% this year.

Ehher Duzhanievsky of S3 Partners said, "There are still many hedge funds and investors who believe that this rally will retreat or at least that many of the high-flying stocks will lose momentum and revert to the mean."

This content was produced with the assistance of AI translation services.