The market might be in a bull run at the moment, there’s a lot of volatility present — in 2024, short sellers have managed to secure record profits, even off of notable winners such as Nvidia (NASDAQ: NVDA) and Tesla (NASDAQ: TSLA), as evidenced by the record-breaking weekly profit seen in late April.
However, with stock market valuations at an all-time high (ATH), and significant macroeconomic concerns still present, the bull run has done little to deter short sellers.
For those looking to capitalize on bearish bets and market pullbacks, Finbold has compiled a list of the three most-shorted stocks in the S&P 500.
Picks for you
Super Micro Computer (NASDAQ: SMCI)
A manufacturer of high-performance and high-efficiency servers, Super Micro Computer (NASDAQ: SMCI) was, and perhaps still is poised to benefit significantly from the rapid expansion of AI. Then, on August 27, short-selling activist firm Hindenburg Research released a report alleging accounting manipulation and sanction evasion.
At the time, SMCI shares were trading at $54.76 — by the close of the next trading day, prices had dropped to $44.35, for a 19.01% drop. While not as devastating as some of Hindenburg’s reports, SMCI stock prices have failed to recover as of the time of publication, as they are currently trading at just $47.45.
Although this move to the downside has only managed to bring year-to-date (YTD) returns down to 66.21%, short sellers are obviously smelling blood in the water — at press time, 20.15% of the stock’s float has been shorted.
Still, it should be noted that Wall Street analysts are undeterred — after a 10-1 stock split, the average price target for SMCI stock is $69.13 — which would equate to a 45.9% upside.
MicroStrategy Inc (NASDAQ: MSTR)
The largest corporate holder of Bitcoin (BTC), MicroStrategy has thus far managed to outperform the S&P 500 — however, seeing as its price is highly correlated with the cryptocurrency, numerous traders have entered short positions, betting against a potential BTC breakout.
At present, 16.83% of the stock’s float has been shorted — and while founder and CEO Michael Saylor has gone on record with grand visions of MSTR becoming the first Bitcoin bank, technical analysts have pointed out troubling bearish divergences that could spell a correction in the short term.
At the time of writing, MSTR shares are trading at $242.70 — bringing total YTD returns up to 254.23%. It certainly seems like the bulls are winning at the moment — but any significant correction would likely see short sellers pocketing impressive returns.
International Paper (NYSE: IP)
Short sellers might be concentrating primarily on tech and semiconductor stocks due to their outsized gains in recent times — however, any business that’s showing signs of weakness is fair game.
International Paper (NYSE: IP), the largest pulp and paper company in the world, has seen an unexpectedly strong performance in 2024. At press time, IP stock is trading at $48.76 — the stock is up 33.44% on a YTD basis, although it has traded in a tight range for the last 30 days.
Amidst issues with maintaining profitability, the company announced that four facilities will be shut down — laying off more than 650 workers.
While consensus estimates see a slight revenue increase coupled with a stark decline in earnings per share (EPS), short sellers seem quite confident that IP shares will see a lot of their 2024 gains undone — as 12.52% of the stock float has been shorted.
