Sirius XM Holdings Inc (SIRI) shares shorted have been in steady decline since the end of March 2019, but since the beginning of June short selling, along with its stock price, has been increasing. An additional 9.8 million shares of SIRI were shorted in June, an increase of +5.60% even as its stock price increased by 4.33%. Shorts were down $39 million in mark-to-market losses in June, wiping out virtually all of their year-to-date profits. SIRI shorts are now up justÂ $1.6 million in year-to-date mark-to-market profits, +0.14%.
SIRI is the third largest short in the domestic Cable & Satellite sector behind Charter Communications (CHTR) and Comcast Corp (CMCSA). The sector has outperformed both the S&P 500 and the Nasdaq with a 27.5% return for the year, including up 2.75% in June, but we are seeing increased short selling this month. Shares shorted in the sector increased by 13.3 million shares in June, adding $432 million in short exposure and bringing total short interest for the sector up to just over $12 billion. This is the highest level of short exposure weâ€™ve seen over the last two years.
CHTR, CMCSA and SIRI make up 68% of all the short exposure in the sector even though short selling in the three companies generated $1.49 billion in mark-to-market losses for the year.
SIRIâ€™s increased short selling may be an indication that the market thinks its June mini-rally is over. SIRIâ€™s stock price bottomed out at $5.27/share on June 3rd, shorts are hoping that the stock continues its recent slide and tests the $5/share level.
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