12 Most Shorted Stocks in 2024

Fahad Saleem
9 min read

In This Article:

In this article, we will take a detailed look at the 12 Most Shorted Stocks in 2024. For a quick overview of such stocks, read our article 5 Most Shorted Stocks in 2024.

Short-sellers may be annoying for corporations (and Redditors?), but investors usually find themselves thanking these companies for doing the often back-breaking and excruciating research that is required to unfold financial irregularities, fraud, misconduct and mismanagement in corporate America. Short sellers are always in the news as they remain on the lookout for their next prey. Consider  Hindenburg Research for example, the activist short-selling firm led by Nathan Anderson. Hindenburg made headlines last year when it went after companies of billionaires Carl Icahn and Gautam Adani. The power of Hindenburg’s attack could be gauged from the fact that Adani’s empire of businesses lost over $100 billion in market value while his personal worth tanked by $80 billion. Adani has since rebounded, but the billionaire’s conglomerate was surely jolted to the core by the short-selling firm.

Performance of Short-Selling Firms in 2024

Short sellers aren’t sitting idle this year too. Recently, insurance company Global Life shares tanked, losing about $5 billion in market value in a few hours, after a short-selling firm called Fuzzy Panda Research accused the company of financial misconduct and ignoring insurance fraud. Over the past five days through April 15 Global Life shares had lost about 48% in value. Bloomberg recently said, citing data from short-selling and retail investing data firm Breakout Point, that Fuzzy Panda was the best-performing activist short seller in 2023.

But how do short sellers perform when it comes to returns? Do they actually make any money beyond creating a buzz and causing negative PR for major companies? A CNBC report, citing data from Breakout Point, said that Hindenburg’s top short targets last year saw an average share price decline of 42% in 2022. In 2023, the firm’s seven short targets plunged 36% on average.

Benefits of Following Short-Selling Activity in Financial Markets

Long-term investors can take advantage of the information and research conducted by short sellers. A research conducted at Wharton showed that  previous studies have “consistently demonstrated that, as a group, short‐sellers are sophisticated investors with superior information processing capabilities.” Some other studies show that short sellers don’t go about preying on companies without any basis. In fact, they use age-old means of market research using financial ratios and fundamental analysis before narrowing down their targets. A research paper published at the University of Michigan Business School talks about research from Asquith and Meulbroek (1996) which says that short sellers “as a group” successfully "identify securities that subsequently underperform the market." The research also talks in detail about the importance of financial ratios and fundamentals in the world of short-sellers:

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