By Sinéad Carew
(Reuters) – Shares in Sirius XM Holdings were down 10.5% on Friday, erasing some of their dramatic gains in the previous day’s session with analysts attributing the volatility to a short squeeze, as well as a rebalance of the Nasdaq 100.
U.S. satellite and online radio company, Sirius XM, which is majority owned by Liberty Media, last traded at $6.99 after closing up 42% at $7.81 on Thursday for its biggest one-day percentage gain since March 2009.
Analytics firm Ortex estimates that 34% of Sirius’s publicly available shares are sold short, where bearish investors borrow shares to sell them “short” with the aim of buying them back at a lower price to repay the debt and pocket the difference.
A short squeeze is when these investors are forced to quickly cover their bets to limit losses if a stock gains ground instead of falling.
Short sellers were reportedly attempting a complicated trade to make money off the reformulation of Liberty Media’s tracking stocks, related to…
2023-07-21 12:31:24
Link from finance.yahoo.com
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