Shortsellers targeted wider range of companies ahead of Trump's 'Liberation Day'
LONDON, April 17 (Reuters) - Shortsellers targeted a wider range of equity sectors in March before U.S. President Donald Trump's April 2 "Liberation Day" tariff announcement and raised negative bets on a cluster of big tech stocks, data and tech firm Hazeltree said on Thursday.
Super Micro Computer (SMCI.O), opens new tab emerged as the most crowded security, knocking oil and gas producer Chevron (CVX.N), opens new tab off the top spot, a position it had held for the past two months, the report showed.
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Tech stocks had previously dominated the list of the top 10 most shorted U.S. large caps. Just five of March's top 10 most shorted were tech stocks, versus eight in February, Hazeltree said.
"We observed signs of the threat of tariffs being telegraphed to the markets during March," said Tim Smith, managing director of data insights at Hazeltree.
"Our analysis of shorting activity in the Americas suggests that short sellers began reducing their tech exposure in anticipation of the full implementation of tariffs — a potential sign of early repositioning."
IBM (IBM.N), opens new tab, MicroStrategy (MSTR.O), opens new tab, and ON Semiconductor (ON.O), opens new tab were among the biggest targets for short selling, while Capital One Financial (COF.N), opens new tab and sportswear maker Lululemon (LULU.O), opens new tab were among non-tech shares on Hazeltree's top 10 most shorted.
Shorting a stock involves borrowing the shares to sell them at one price before repurchasing them more cheaply. The more crowded a short bet, the higher percentage of funds that are shorting it, the Hazeltree report said.
Shares in Super Micro Computer, one of a number of stocks exposed to artificial intelligence, surged 45% in February to six-month highs, before dropping in March.
Hazeltree assigns a rating out of 100 to determine how heavily investors have shorted a company's shares. In March, Super Micro Computer had a rating of 99, up from 91 in February, while IBM scored 93, up from 85 in February and MicroStrategy scored 93 in March versus 85.
Europe's most shorted stock in March was Gucci owner Kering (PRTP.PA), opens new tab for the third straight month, Hazeltree said, followed by fast-fashion retailer H&M (HMb.ST), opens new tab.
H&M had the highest institutional supply utilisation rate, at 99%, Hazeltree added.
This metric refers to the percentage of institutional investors' supply of a security that is being lent out, Hazeltree said. The higher the percentage, the more demand there is among investors to borrow that stock and the harder it is to open new short positions.
In Asia, Japanese chipmaking device supplier Disco (6146.T), opens new tab was the most shorted large-cap stock for a third straight month.
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