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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Sometimes, stories write themselves. Other times they don’t. Here’s a chart:
The above interactive (which might take a moment to load) shows current short interest globally. It uses the Bloomberg World Large, Mid & Small Cap Price Return Index, an $80tn benchmark that covers 99 per cent of global equities by market cap. We’ve divided the issuers up by their primary exchange and overlaid short-interest data from S&P Global, accurate to February 23. Numbers are converted to dollars and, in search of a level playing field, the percentages quoted use shares outstanding rather than free float.
It was a fair amount of work and it revealed very little.
One finding is that is that Tokyo, Korea and Taiwan are the most popular venues for shorting with more than 2 per cent of total shares outstanding on loan. Shorts (low by historical standards) are also above the global average in NYSE, Stockholm and Toronto.
Visa is by value the world’s most shorted stock with shares on loan valued at $105bn. That sounds like it might be interesting but probably isn’t. We’ll explain why after this challengingly abstract log-scale bubble chart that includes all 10,391 stocks in the data set, sized by market cap:
Visa is in the process of rejigging the three-tier share class structure it put in place so financial institutions could buy into its IPO without being exposed to legal risk around interchange fee litigation. That means a lot of hedging. The value of the short is nearly equal to the value of the shares that can be converted.
Three Nasdaq-listed companies, Nano Dimension, Ehang Holdings and Canaan, appear in the S&P data as having short interest that’s a multiple of the shares outstanding. This is hypothetically possible. But exchange-reported amounts for all three stocks are much lower and alternative data sources such as Fintel give dramatically different results, so in an abundance of caution we excluded them from the previous graphs.
Had we not, the Nasdaq screen would’ve looked like this:
Ignoring the oddities the world’s most shorted stock, both in absolute and relative terms is Nio. The NYSE-listed Chinese EV maker listed has a loan equivalent to 94 per cent of its $11.2bn market cap.
Other familiar and very heavily shorted names include Tencent Music, Beyond Meat, iRobot and B Riley Financial. Paris-listed Atos, with 26 per cent short interest, is most shorted outside the US. CBOE’s BZX equities exchange features in the second chart because of just one stock, CBOE Global Markets Inc.
None of this constitutes a scoop, we’ll be honest, but it’s a Friday. Feel free to have a play and see if you can make more out of the data than we could.
Read the full article here