Short Sellers Reaped Nearly $400M in a Day From the Bank Stock Rout

ETJ

ETJ

Short Sellers Reaped Nearly $400M in a Day From the Bank Stock Rout
Ryan Hogg - Markets Insider
Short sellers made nearly $400 million in the space of a day betting against regional banks including PacWest Bancorp and Western Alliance Bancorp, a report says.
Reuters reported that investors shorting the regional banks, which also included First Horizon Corp., took in $378.9 million during Thursday's trading session, citing data from ORTEX, a financial analytics platform monitoring short interest.
/jlne.ws/3HJvOVo
 
Unlike the meme stocks of 2020, the KRE members are doomed since this crisis in confidence can only be ebbed by politicians extending FDIC insurance limits. That is very unlikely given the state of politics in the US.

The most shocking collapse has to be PacWest. One day they claim in the post earnings conference all is well and deposits are rising and 2 weeks later they are looking for "strategic alternatives."

Cramer on Bubblevision says to ban short selling on all bank stocks. Another trader turned socialist.
 
Western Alliance - they probably shorted it on 4 May 2023, Thurs, 9:45am ET.

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nitrene said:
Unlike the meme stocks of 2020, the KRE members are doomed since this crisis in confidence can only be ebbed by politicians extending FDIC insurance limits. That is very unlikely given the state of politics in the US.

The most shocking collapse has to be PacWest. One day they claim in the post earnings conference all is well and deposits are rising and 2 weeks later they are looking for "strategic alternatives."

Cramer on Bubblevision says to ban short selling on all bank stocks. Another trader turned socialist.
More...

banning short selling works for companies like banks because bear raids are enough to take them out. The problem banks will fail anyway But they won’t take out solvent banks with them.

The banking crisis is tricky. The fed need only backstop deposits to protect the economy. They can screw over the equity holders and no one will care. The problem is that the only place for these deposits to go is JPM, C, BAC, and WFC and that becomes a problem And there’s no real solution for that.
 
PACW today before market open had such a high rise of +35%:
PACW_Premarket.png


But it all was just a useless effort by the goberment or who ever :-) as it all eroded, current numbers:

PACW_later.png


I think this bank, and maybe also WAL, will fall to zero :-)
 
newwurldmn said:
banning short selling works for companies like banks because bear raids are enough to take them out. The problem banks will fail anyway But they won’t take out solvent banks with them.

The banking crisis is tricky. The fed need only backstop deposits to protect the economy. They can screw over the equity holders and no one will care. The problem is that the only place for these deposits to go is JPM, C, BAC, and WFC and that becomes a problem And there’s no real solution for that.
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All of what you said is correct. The problem I have is in the good times these people are capitalists and in the bad times they want price discovery to disappear just like in September 2008. If all it takes is a few short sellers to destroy your business it should not be publicly traded.
 
nitrene said:
All of what you said is correct. The problem I have is in the good times these people are capitalists and in the bad times they want price discovery to disappear just like in September 2008. If all it takes is a few short sellers to destroy your business it should not be publicly traded.
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I agree with your frustration on the hypocrisy.

I think banks have proven again and again that there is not enough regulation for that industry.

I also agree that the only large businesses that can go bankrupt overnight seem to be hedgefunds and banks.
 
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