2021 Update on EU Shorting Activity
Insights from 2021 so far, based on the European Short Disclosure Regulation's daily filings. Ingested and analyzed using Novus tools.
This report contains data from the European Short Disclosure Regulation’s (ESMA) daily filings. Using the Novus platform we have generated insights from over 30bn Euros in short investments across more than 150 managers. To follow along and gather your own insights, we encourage you to follow along on our EU Short Dashboard.
EU Short Market
The EU short market has seen an overall decrease in both AUM as well as position count since 2018. AUM hit a 5 year low in March 2020 when it dropped below EUR 30bn while the position count remained mostly unaffected. Since that time, after a minor uptick in September 2020, both have continued to decrease. Position count currently sits at 368 and AUM at about EUR 29bn.
Best Performing Short
The best performing short for the last 30 days is CD Projekt, a Polish video game production company. CD Projekt is known for their production and distribution of one of 2020’s most anticipated video games, Cyberpunk 2077. Their labeling as a “best” performing short indicates that company value has been decreasing in recent months, likely tied to Cyberpunk 2077’s disastrous rollout back in December. Their current 30-day return is currently (22.16%) and may continue to decrease in the wake of a second class-action lawsuit being filed in connection to Cyberpunk 2077’s poor performance.
Top Short Interest
Blue Prism Group PLC has been at the top of this leaderboards and will likely continue to be. Sylebra Capital has held a strong short position in Blue Prism for months now at an astonishing amount, 19.34%. To put that in perspective, the next closest company on the most shorted names list only warrants 5%, with several proceeding names that remain close to 3-5% . The other big name holding a significant short position in Blue Prism Group is J.P. Morgan Asset Management UK, with a short position of 4%.
Most Covered Short
In January Fiat Chrysler and PSA Group merged to become Stellantis, an automotive manufacturer headquartered in Amsterdam. Although Both child companies saw decreases in net income through the end of 2020, continuing EU short data suggests that perceptions are favorable towards the merger as the short exposure has decreased from 4.88% to 0.82%.
Most Crowded Short
Vyne Therapeutics has been the most crowded short since January. According to the EU Short data, hedge fund universe percentage of shares owned is 23.45%. The appeal for this volume of short interest in VYNE is possibly due to the price volatility. At the beginning of the year, the price for VYNE was more than double what it had been for the previous 3-4 months, and quickly declined again around the end of February.
Explore the full list.
For those that have stayed up to date with EU Short Filings, Sylebra should be a familiar face. They’re known for investing in mid-size technology companies with a strategy that involves balancing long and short positions to maintain a relatively low net market exposure. For the past several months they have been at the top of our EU Short exposure leaderboard holding 13.18% in overall short exposure. This is largely due to their massive short position in Blue Prism Group PLC at 12.88% which is has increased from their 2020 year-end exposure of 11.16%.
Marshall Wace LLP
Marshall Wace LLP comes in as the number two fund on our EU Short Exposure leaderboard. In contrast with Sylebra, Marshall Wace has a much more diversified short portfolio, with exposure to 50 different names. Sylebra however, only has 6. Most noticeable are the three names that are new to Marshall Wace’s short portfolio since the end of 2020; Tesco PLC, Eurofins Scientific, and BioMerieux.
BlackRock Institutional Trust Company NA
Another regular, BlackRock, comes in at third. Their list of short exposures includes J Sainsbury PLC and Deutsche Bank AG. Short interest in J Sainsbury has seen an increase since last year after, “CEO Simon Roberts embarked on a major restructuring in November that closed Argos shops and in-store meat, fish and deli counters.” Deutsche Bank short interest seems to be less correlated with public news and should be interesting to watch.
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