‘A Great Day for Science and Humanity’….and the Shortside?

This week, the CEO of Pfizer broke the news regarding a potential vaccine for COVID-19 that is 90% effective. This has contributed to a rise in global markets around the world. On the flip side, however, last week, we saw a significant increase in shorting of Pfizer (PFE) shares by hedge funds. The chart below with figures from FIS Astec Analytics as featured in Hazeltree’s Data Analytics suite shows this in detail.

The early spike last week (on 3rd November to be precise) seems to suggest that initial signals of an imminent event were felt before yesterday’s announcement. This race to short has been partially reversed yesterday afternoon and overnight although intraday activity today is showing an increasing interest again. Such movements are of course commonplace as short sellers tend to take an initial contrarian view to the general public in such matters. Could it be that they were thinking any share price increase might be temporary? However, it does appear that Pfizer’s partner in this exercise, BioNTech (BNTX), was not similarly impacted but rather continued its slow, steady climb in short interest.

There are of course multiple other developers and manufacturers of a potential vaccine…..Moderna (MRNA), AstraZeneca (AZN), Johnson and Johnson (JNJ), Sanofi (SNY) and GlaxoSmithKline (GSK) none of which have seen any real movement in their short interest level as measured by securities lending activity in recent weeks and certainly not in the last few days. The comparable chart is shown for Moderna below as an example.

It will be interesting to note if other pharmaceutical companies will be similarly impacted as their alternative solutions move along the development and approval process or whether this position remains exclusive to the first mover. Stay tuned to the Hazeltree website www.hazeltree.com for further updates as the news continues to unfold……..