U.S. short sellers profited heavily from the chaos of 2022, to the tune of $300.1 billion, with communication-services stocks being the most profitable. Profit from short selling U.S. stocks and American depositary receipts, on a mark-to-market basis, rose 30.8% in 2022, with an average short interest of $973.33 billion invested, according to a Wednesday report by S3 Partners Research. That followed three tough years in a row where short sellers lost a total of $571.76 billion, S3 Managing Director of Predictive Analytics Ihor Dusaniwsky said in a Wednesday note.
“But short sellers still needed to be good stock pickers in order to maximizetheir returns,” Dusaniwsky said. “Even on a more macro level, picking which sectors to short produced wildly divergent returns.” Shorting communications-service stocks on the S&P 500 Index
produced a 50.7% return of $80.8 billion, according to S3, while shorting industrial stocks netted a 47.6% return of $95.35 billion. Meta Platforms Inc.
was the most profitable stock to short, with a 105% gain in 2022, S3 found. Shorting Google parent Alphabet Inc.