Apple recaptured Wall Street's first short-selling stock

Apple Inc replaced Tesla on Wednesday, "regaining" Wall Street's most shorted position. Tesla has held the crown since the early days of the Covid-19 outbreak. Apple's short-selling totaled $18.4 billion as of Wednesday, surpassing Tesla's $17.4 billion, according to research by financial analytics firm S3 Partners. Since April 2020, Tesla was the most shorted stock on Wall Street for 864 days until Apple "recaptured" the position. Both companies have far more short positions than third-ranked Microsoft Corp, which has a short position of $11 billion as of Wednesday.

The change largely reflects short sellers cutting their exposure to Tesla, Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, wrote in a research note. Instead of making a major adjustment in aggressively shorting Apple.

At the same time, the recent rise in Apple's stock price has also affected investors' shorting against it. Apple shares have risen 17% in the past three months, outperforming the major indexes so far this year. Short sellers profit by betting on a drop in stock prices.

“The increase or decrease in the total amount of shares shorted depends on the increase or decrease in the number of shares shorted and the price of the stock. So if the number of shares shorted remains the same, but the price of the stock increases, its total shorted shares will increase. However, in In the absence of short-selling, short-selling or covering the stock, changes in the total amount of short-selling shares have no impact on the market price of the relevant stock," Dusaniski said.

Tesla stock has also been hot over the past three months, up 37%, Dusanisky noted, with some short covering on Tesla over the past 30 days. He also added that he saw an increase in shorting Apple shares over the same period. From the beginning of 2020, investors have achieved net short covering in both Apple and Tesla stocks.

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