For the record, no new short positions have been taken out in Cineworld since August. But whatever the final outcome for investors in the company, short sellers will have made some serious money. (Cineworld shares are listed in London and New York.)Ĭineworld has just reached a settlement with lenders in the States and the shares have rallied. Since then the company has filed for bankruptcy in the US and shares are down nearly 80% in the year to date – shares can still trade during this process but can be suspended, as often happens in the UK. At the time shares were down more than 34%, with more than 7.54% of shares being shorted (an explanation of how this works is below). Last time we looked at this list in August 2022, Cineworld ( CINE) was number four, having been the most shorted for much of this year. One case study of when short sellers were right was cinema chain Cineworld, which had been at the top of the most shorted list for much of this year. Only over the long term do you know if your instinct was right. Some of the companies on the top 10 most shorted list have seen some chunky falls this year – Naked Wines is the worst with an 82% fall but Ashmore is the smallest faller with a loss of 26%. So price moves can trigger differing reactions: some people see this as a chance to bail out, others to buy shares in great companies at temporarily cheap prices. This is the flipside of people "buying on the dip", which we looked at recently. That could be helpful to retail investors if they’re looking to sell out of an underperforming stock. It gives an insight into what professional investors think about particular sectors, and sometimes gives an early warning sign of a company in trouble. The Financial Conduct Authority (FCA) produces a daily list of the most shorted stocks.
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