Short sellers are feeling the punch in 2023 because the markets staged a smart comeback in the year 2023. They used to make profits by borrowing shares from companies that seemed overvalued, selling them at higher prices, and covering the short positions when they declined.
Short sellers booked a loss of $81 billion
The markets around the world tumbled in 2022, allowing short sellers to improve their fortunes by $300 billion. However, short sellers’ fortunes turned around, with stock markets rebounding strongly in January 2023. According to the latest BNN News, short sellers booked a loss of $81 billion this year, compared to handsome profits in 2022.
Stocks rebound in 2023
The stocks that crashed in 2022 were Tesla Inc. and Coinbase Global Inc. These stocks gained 44% and 73% in January, reversing the fortunes of short sellers. MD (Predictive Analytics) at S3 Partners, Ihor Dusaniwsky, said short sellers incurred heavy losses by short-closing their positions.
The factors driving the stock market recovery include signs of cooling inflation and expected interest rate cuts by the FED in H2 this year. As a result, risky assets are making smart gains. It compelled short sellers to cover their positions.
A Google Ads Business Spin-Off Is Likely in 2023
After spending over 20 years building digital advertising machines, Google expects to spin off the ad business. It expects to send shock waves through the online ad market, valued at $500 billion. If the US Government wins its antitrust lawsuit filed last week, the search giant will be forced to spin off its advertising business.
According to executives in the media and advertising industries, the technology for online advertising would be worth tens of millions of dollars. Google could face challenges in divesting its ad tech business because large tech companies that could afford the deal, like Comcast Corp. to Microsoft Corp., will also face antitrust suits. However, the spinoff is more likely, according to industry observers. The acquiring business could be crowded with small companies.
CEO of Simulmedia Inc., Dave Morgan, said the business that is viable on its own would be the acquirer of the spinoff. Both advertisers and publishers would get flexibility and choice in going outside of Google if the spinoff goes through.
Google took advantage of its dominant market position.
The Attorney General, Merrick Garland, who leads the Justice Department, stated that Google has abused its market dominance in online advertising. The Justice Department told Google to divest its ad exchange and advertising server. Automated transactions take place on the ad exchange between sellers and buyers in a few seconds.
According to information available from the best news websites, the spin-off timing could take several years, and the legal battle will also take more time unless Google decides to settle. Google will also fight to hold the entire ad business under its control. Denying the wrongdoing, Google said the lawsuits are attempts to choose losers and winners in advertising technology, which is highly competitive. The search giant has already hired the services of capable attorneys to fight with the government.
