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One-day mark-to-market profit of $513 million on short bets
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Stock remains halted after falling 63% in premarket trading
SVB Financial Group’s record plunge on Thursday minted short sellers roughly half a billion dollars in paper profits. But they now face a challenge: how to close their positions.
SVB shares plunged by 60% on Thursday as worries mounted over the bank’s operation, netting traders who bet against the stock a one-day mark-to-market profit of roughly $513 million. The stock fell another 63% in premarket trading Friday before being halted, with the Federal Deposit Insurance Corp. ultimately announcing that it had seized the bank.
“SIVB’s closure gives short sellers a windfall profit, but now they have to go through the sometimes-difficult process of liquidating their positions and realizing their mark-to-market profits,” said S3 Partners head of predictive analytics Ihor Dusaniwsky.
“With stock borrow financing costs accruin