We follow 1,167 SPAC securities (equities, units, and warrants) that have short interest on our Blacklight SaaS Platform and Black App. We are seeing active short selling in the sector even though stock prices in the sector have been relatively stable. Over the last 30 days the SPAC & New Issue ETF (SPCX) is down -1.29%. Even with this minimal move in SPAC prices, SPAC short sellers have sold short an additional $673 million of SPAC shares over the last 30 days. Short interest in the SPAC sector is $3.55 billion with an average Short Interest % Float of 16.34%, an average S3 SI % Float of 13.41% (which includes the synthetic longs created by every short sale in the trade float denominator) and an average stock borrow fee of 23.93%. In contrast stocks in the U.S. have a total short interest of $1.05 trillion, SI % Float of 5.34%, S3 SI % Float of 4.80% and an average stock borrow fee of 0.65%.
Change in short interest is made up of the change in market value of the underlying shares as well as short selling and short covering activity in these securities. Total short interest in the sector increased by +$665.4 million over the last 30 days. This was made up of -$7.4 million in a mark-to-market decrease and +$672.8 million of new short selling. Churchill Capital Corp IV (CCIV) had the largest amount of new short selling with +$271.6 million new short sales followed by just over $50 million of new short sales for Altimeter Growth Corp (AGC) and Social Capital Hedosophia Holdings V (IPOE).
The relatively steady prices in the SPAC sector over the last 30 days have has slowed the growing profitability of short positions in the sector. SPAC shorts were actually down -$17.5 million, -0.53%, on an average short position of $3.3 billion over the last 3 days. The most profitable SPAC shorts over the last 30 days were Churchill Capital Corp IV (CCIV), Altimeter Growth Corp (AGC) and TPG Pace Beneficial Finance Corp (TPGY). While the least profitable SPAC shorts over the last 30 days were Social Capital Hedosophia Holdings V (IPOE), Pershing Square Tontine Holdings (PSTH and Arclight Clean Transition Corp (ACTC).
Even with the small mark-to-market loss over the last 30 days, SPAC shorts are outperforming the market on a year-to-date basis, up +$763 million, +33.15% for the year. Churchill Capital Corp V (CCIV) continues to be the most profitable SPAC shorts by a wide margin while there are no big number SPAC names in the worst performing side of the ledger.
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
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.