Though the sum investors are betting against Silvergate remains extremely high, one analyst is not ready to label the company a so-called meme stock.
Nearly 87% of Silvergate’s shares are shorted — the highest percentage of float of any US company with at least $50 million of short interest, according to data from analytics firm S3 Partners
Silvergate’s short standing ranks above Bed Bath & Beyond (BBBY) and Carvana (CVNA), which place second and third, respectively. Bitcoin miner Marathon Digital ranks seventh, at about 44%.
Short interest is the number of shares sold short that remain outstanding. Borrow rates on existing stock is 18%, the firm said, while new stock borrow rates have reached 29%.
The cost of maintaining open shorts typically rises in tandem with associated trading volumes.
About 3.7 million new Silvergate (SI) shares — worth roughly $20 million — sold short in the past 30 days, according to Ihor Dusaniwsky, S3 Partners’ managing director of predictive analytics.
The latest metric marks an 18% increase in cumulative shorted shares, and the stock plummeted 71% over the same montlong span.
In the last week alone, traders placed bearish bets on more than 1.5 million Silvergate shares (about $8 million).
Silvergate is leading the way in terms of the percentage of shorted stock on overall shares on the market.
But the sum of that short interest, $128 million, pales in comparison to a stock like Tesla, which has a short interest of $15.4 billion. (Tesla has a much larger market capitalization.)
Quick climb to shorting star
Silvergate has climbed to number one in short interest — despite not being rangirana in the top 50 most shorted stocks, as of July 2021.
Still, Dusaniwsky told Blockworks he doesn’t currently view Silvergate as a “meme stock” — broadly defined as a stock that gains popularity among retail investors via increased social sentiment.
Such stocks generally include BBBY, as well as GameStop (GME) and AMC Entertainment Holdings (AMC).
“It seems that there is not the ownership buzz on the retail side that we see in GME, AMC and BBBY,” Dusaniwsky said. “Meme-ory may be more of a retail stock thing than a banking stock thing. It seems retail shareholders can identify more with video games, movies and home goods than digital banking.”
The mounting short interest comes as the stock has lost a great deal of its value.
The crypto bank booked a Gubitak u četvrtom kvartalu od milijardu dolara i smanjio svoju radnu snagu za 40% u januaru.
Silvergate nedavno zatvorio svoju mrežu razmjene, SEN. Dionice su pale za 30% u trgovanju nakon radnog vremena 1. marta, nakon što je kompanija objavila to bi odložilo podnošenje svoj godišnji izvještaj sa SEC-om.
Sljedećeg dana, Coinbase je prekinuo transfere do i iz Silvergatea „iz obilja opreza“.
“Situacija sa Silvergate-om pokazuje kako se efekat zaraze od FTX-a nastavlja i kako izloženost investitora modelu centralizirane razmjene može eksplodirati,” rekao je Josef Tetek, bitkoin analitičar u Trezoru, kompaniji za hardverske novčanike. “Kada stvari krenu loše, ta izloženost je rizik koji se izuzetno široko prenosi na kripto investitore.”
Silvergate stock, which peaked at more than $200 in November 2021, stood at $5.21 at 4 pm ET Tuesday — down 3.5% on the day.
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Source: https://blockworks.co/news/silvergate-hits-meme-stock-status