Alibaba Group Holding Ltd.’s short sellers have gotten burned this year as optimism about a possible trade resolution has lifted the company’s American depositary shares.
Short interest in Alibaba BABA, -0.69% has grown faster than general short interest in Hong Kong/China names so far in 2019, according to data from S3 Partners, but these bearish calls have thus far proven a bad bet. Alibaba short sellers are down $5.49 billion in mark-to-market losses on a year-to-date basis, or 29%. These paper losses outweigh the $3.
Other China names with high short exposure include Tencent Holdings Ltd. TCEHY, -0.82% JD.com Inc. JD, -0.94% iQiyi Inc. IQ, -1.57% and China Construction Bank CICHY, -0.77% according to the report. “Compared to the Hang Seng HSI, +0.26% which is up 11.5% for the year, and CSI 300, which is up 25.5% for the year, short sellers severely underperformed the HK/China markets,” Dusaniwsky wrote.Alibaba shares have gained 18% over the past three months, while the S&P 500 SPX, -0.64% has risen 2.9%.
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