Short selling forces betting on falling stock prices in the future are focusing on Tesla and Netflix, the leading U.S. technology stocks, CNBC, an economic media outlet, reported on the 24th (local time).
CNBC reported that using data from asset management firm S3 Partners, short selling forces are investing $114 billion in short selling, up 11.6% from a year earlier.
Short selling forces are intensively attacking Tesla and Neplix, the leading U.S. technology stocks.
Short selling is an investment strategy in which if stock prices of certain stocks are expected to fall, they borrow stocks without holding them and place a sale order. It is a technique mainly used to seek ultra-short-term trading profits, and if the stock price falls at a low price, it makes a market profit by returning it to the stock lender (holder) within the payment date.
The high volume of short selling means that the stock is likely to fall in the future.
Tesla is the company most targeted by short selling forces. Tesla plunged nearly 12% this year, with short selling forces estimated to have collected about $2.3 billion.
The next target is Netflix. Netflix plunged 35% this year, with its stock price plunging more than 20% on the same day as subscribers confessed in a recent earnings announcement that it fell short of expectations in the first quarter of this year.
Short selling forces sold short selling to Netflix, earning about $1.6 billion, CNBC said.