Short Bets Against Stock Top $34B

Nvidia (NVDA) finds itself at the center of speculation, as there are more than $34 billion of short bets outstanding against the tech giant’s stock, according to S3 Partners. This bearish position comes on the heels of the company’s much-anticipated 10-for-1 stock split scheduled for Friday.

Yahoo Finance shaun smith And Brad Smith Let’s take a deeper look at the anticipation surrounding Nvidia’s stock.

For more expert insights and the latest market activity, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video Transcript

Let’s talk a little about NVIDIA here.

This week NVIDIA surpassed Apple to become the world’s second most valuable company.

But will the race for tech favourites come to a halt anytime soon?

There are about $34 billion of short bets outstanding against the chip giant, according to S3 Partners.

However, according to the data analytics firm, this is almost the same amount that short sellers have bet against Apple and Tesla combined.

So ultimate.

This is all happening ahead of NVIDIA’s big stock split where if you look at some of the historical performance 12 months out and this is according to research that 12 months after a stock split, they tend to outperform the index.

The company initiating the split tends to outperform the index here, and returns are typically around 25.4%, while the S&P 500 returns 11.9%.

But the shorts are certainly moving in, at least in this near term.

Shorts are on the rise, and it’s interesting to see here when you take a look at NVIDIA, which is following some of the other, uh, large cap tech names that have split their stock over the last several years.

I believe this is the fourth, uh, Magnificent Seven name to split its stock in the last as many years, so you might be considering what this will mean for the shares.

Ultimately, in the short term, it could be a small increase.

This could give the shares a slight gain.

But in the last few weeks since it was announced, many of the strategists we’ve spoken to said they don’t expect it to be the main driver for stocks, and that it will likely overshadow any movement we see.

It seems like this would be more of a setback than anything else.

But again, the Bank of America data was just that—to put that performance in context.

But when you look at their full chart, you can see that there’s clearly a discrepancy between external performance and internal performance when you break it down by decade and compare it to what we saw.

But the overall average was only about 25%, which was clearly ahead of those who did not do so in several years.

I know you see me smile sometimes, and maybe it just creates fear because it’s like, what is he going to say?


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