In the minds of some Wall Street investors, Moderna Inc. and Novavax Inc. shares have run their course and are prime candidates for bets that they will fall this year, in a JPMorgan Chase & Co. survey of 80 hedge fund and specialist investors searching for biotech stocks, to short in 2021, the two vaccine manufacturers came out on top.
Since last year, when it pursued a Covid-19 vaccine, Moderna has been a short goal. Although Novavax is still awaiting regulatory approval, its shot became the second to be granted an emergency authorization in the US.
Beam Therapeutics Inc., which is backed by Cathie Wood’s Ark Investments, and Biogen Inc., which has been slashed ahead of an expected regulatory decision on its notorious Alzheimer’s medication, were also among JPMorgan’s top short choices.
Despite gains of 2,700 percent for Novavax and 434 percent for Moderna last year, many short sellers have remained committed to the biotech stocks. Due to a recent lull in the retail trading frenzy, hedge fund players betting against the pair can eventually see a return on their investment.
According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, last year’s rallies took a $2.14 billion bite out of bearish Moderna investors and another $837 million out of Novavax short sellers.
Short-sellers have lost $766 million in Moderna and $521 million in Novavax this year, according to Dusaniwsky, with both stocks up in the double digits. According to S3 Partners results, Moderna remains a top choice for bearish biotech investors, with $2.11 billion worth of shares sold short. Novavax stock is shorted for a little more than $900 million.
According to some analysts, the months following the pandemic’s spread last March, were the most difficult for short sellers ever, as the stock market recovered from its low point. In an interview, Dusaniwsky said, “Short sellers seem to be co
“The sentiment has shifted from scarcity to oversupply and more to a debate of demand in 2022,” Yee said of Moderna. The biotech, while up 24 percent this year, is down about 30 percent from a Feb. 8 record. Novavax tumbled 44 percent over the same period, though is up almost 60 percent this year.
