We follow 1,138 SPACs (equities and warrants) that have short interest on our Blacklight SaaS Platform and Black App. We have seen active short selling in the sector as stock prices in the sector have declined by -25% since mid-February. Over the last 30 days the IPOX SPAC Index is down -3.36% and the SPCX ETF is down -0.72%. In response to these declines SPAC short sellers have sold short an additional $29 million of SPAC shares over the last 30 days, bringing total short interest in active SPAC securities to $2.36 billion.
SPAC average Short Interest % Float is 12.07% while the average S3 SI % Float of 10.39% (which includes the synthetic longs created by every short sale in the trade float denominator) with an average stock borrow fee of 7.45%. In contrast, stocks in the U.S. have a total short interest of $1.16 trillion, SI % Float of 5.25%, S3 SI % Float of 4.76% and an average stock borrow fee of 0.56%.
Total short interest in the SPAC sector has decreased slightly from $2.37 billion to $2.36 billion over the last 30 days. This -$9 million decrease consisted of a -$38 million change in market value due to stock price declines offset by +$29 million of new short selling. As the value of their short SPAC holdings were decreasing, short sellers were generating mark-to-market profits and continuing to sell into the price weakness and increasing their short positions.
While there were no SPAC securities with outsized short selling or covering there was short selling activity in PSAC and VIH and three Gores SPACs (GTPBU, GHVI & GRCV).
And short covering in PDTH, TETCU and KAHC topped the 30 day list.
SPAC short sellers were up +$27 million, +1.06%, in net-of-financing mark-to-market profits over the last 30 days. The sector’s overall weakness over the last 30 days did not affect every stock equally as only 46% of the shorted SPAC securities were profitable, up $52 million in mark-to-market profits, +4.61%. The 54% of unprofitable shorted SPAC stocks were down -$25 million, -1.72%. Overall, existing shorted SPAC securities are up +$425 million in net-of-financing mark-to-market profits for the year, +23.33%. Even with this month’s -$20 million of mark-to-market losses, Churchill Capital Corp IV (CCIV) continues to be the most profitable SPAC short with +$165 million in year-to-date profits, +29%.
Looking at short selling trends over time provides insight into overall market sentiment as well as the strength of bearish conviction in individual equities. Our Blacklight SaaS platform and Black APP provides an up to date view of short selling and short covering on an equity, sector, index, or country-wide basis allowing investors\traders to better manage their existing long and short positions.
Research Note written by Ihor Dusaniwsky, Managing Director of Predictive Analytics, S3 Partners, LLC
For deeper insight into short side data and analysis contact me at Ihor.Dusaniwsky@S3Partners.com
For short side data and access to our research reports go to https://shortsight.com/ .
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