Feb 3, 2022 - Economy

Short sellers take aim at consumer stocks

Percentage of shares held by short sellers, by sector
Data: S&P 500 Global Market Intelligence; Chart: Baidi Wang/Axios

Short sellers were apparently delighted in Facebook parent Meta’s plunging stock price today — but they’d be even happier if the consumer discretionary sector charted a similar path.

By the numbers: Consumer discretionary stocks are the most shorted sector, with short sellers holding 4.6% of their shares, according to S&P Global Market Intelligence.

  • That’s more than double the S&P 500 average of 2.1%.
  • The information technology sector ranks as the fourth most shorted industry. Meta's decline so far this year has been worth more than $2 billion to short sellers, Reuters reported.

The bottom line: Investors are betting that stocks that benefited from a spending binge by consumers are poised to cool off.

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