Goldman Sachs Group Inc (GS US) down $15.58 per share, or -7%, on weakness in the financial sector and news that Malaysia is looking to recoup nearly $600 million in fees and commissions paid for $6.5 billion in bond deals for its state fund 1MDB. 1MDB is in the news for embezzlement and money laundering suspicions.
GS short interest is at $898 million, the second largest short in the Investment Banking & Brokerage sector behind Charles Schwab (SCHW US) with $906 million in short interest. Share shorted are 4.03 million, down 700k shares or 15% since the beginning of November. Short interest as a % of available float is 1.22%.
Today’s price drop earned G.S. short sellers $64 million in mark-to-market profits, bringing year-to-date profits to $245 million, a 20.6% year-to-date return. With GS hitting lows it hasn’t seen since November 2016, we expect continued short selling in the stock in anticipation of further news regarding the 1MDB claw back.
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Managing Director Predictive Analytics, S3 Partners, LLC
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