Photo by WClarke via Wikimedia. 

The coronavirus outbreak severely disrupted the stock market and the economy in 2020. While many stocks ultimately recovered their early-year losses thanks to aggressive federal stimulus spending, some stocks are still feeling the pandemic pain.

In 2020, U.S. short sellers logged $345 billion in net in mark-to-market losses, according to S3 Partners analyst Ihor Dusaniwsky. “The largest losses were in the consumer discretionary and information technology sectors, while there were minimal profits in the energy, real estate, financial, and utilities sectors,” he said Thursday.

But even though the S&P 500 rallied 16.3% in 2020, short sellers still did well in some of the worst-performing stocks.

Best Short Trade Of 2020

Dusaniwsky said oil & gas major Exxon Mobil Corporation (XOM) was the most profitable short in the market in 2020. Exxon short sellers earned more than $1.28 billion in profits in last year thanks to the stock’s 40.9% 2020 decline. AT&T Inc. (T) was a close second, with short sellers earning a mark-to-market profit of more than $1.26 billion.

Dusaniwsky said Exxon averaged about $2.2 billion in total short interest in 2020. The stock is one of several high-profile energy stocks that treated short sellers very well last year.

Most Profitable Shorts

Here’s a look at the 10 most profitable shorts in the market in 2020, sorted by net mark-to-market profits:

• Exxon (XOM): $1.28 billion.
• AT&T (T): $1.26 billion.
• Raytheon (RTX): $1.2 billion.
• Luckin Coffee Inc. - ADR (LKNCY): $1.06 billion.
• Wells Fargo & Co. (WFC): $1.03 billion.
• Wirecard AG (WRCDF): $868.7 million.
• Chevron Corporation (CVX): $831.3 million.
• McKesson Corporation (MCK): $814.6 million.
• Simon Property Group Inc. (SPG): $711.1 million.
• Energy Transfer LP Unit (ET): $693.8 million.

Benzinga’s Take

The most profitable shorts are not necessarily the stocks that dropped the most in 2020, but rather stocks that have dropped significantly and also have large amounts of short interest. Percentage-wise, the best short trade of the year among these 10 stocks was Luckin, which saw its share price drop from $39.36 on Dec. 31, 2019, to $8.50 on Dec. 31, 2020.

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