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Bilibili
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Chinese video-sharing service Bilibili hammered by record bearish bets even after company’s shares dive almost 90 per cent

  • Short interest in Bilibili jumped to a record last week, with bearish positions accounting for almost half of shares outstanding
  • The live-streaming platform operator has become one of the most shorted US stocks among companies with a market value of US$2 billion or more

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Shanghai-based Bilibili is among a slew of unprofitable Chinese companies in the social media and entertainment sectors. Photo: Shutterstock
Bloomberg
Chinese video-sharing services provider Bilibili has emerged as a prime target for short sellers in the US even after the stock tumbled almost 90 per cent over the past 18 months, a sign of how pessimistic some investors are about the economic outlook.

Short interest in Nasdaq-listed Bilibili jumped to a record last week, with bearish positions accounting for almost half of shares outstanding, IHS Markit data show. That makes the live-streaming platform operator one of the most shorted US stocks among companies with a market value of US$2 billion or more.

The bets show just how wary – and selective – investors have become as it relates to putting money into China’s technology sector, as the Nasdaq Golden Dragon China Index sinks about 30 per cent this year.

The stock is under pressure even after Beijing’s year-long regulatory clampdown eased, in part because investors are concerned that Bilibili will not become profitable any time soon, given that advertising spending is weakening along with the slowing economy. Bilibili closed 1.6 per cent lower on Friday.

Chinese video-sharing services provider Bilibili’s sign is displayed at the company’s headquarters in Shanghai. Photo: Shutterstock
Chinese video-sharing services provider Bilibili’s sign is displayed at the company’s headquarters in Shanghai. Photo: Shutterstock

“This market reaction makes sense in the current environment where cost of capital is rising and investors are no longer willing to assume these companies turn profitable and grow profits in the distant future, especially with regulatory tightening and difficult economic conditions in China,” said Louis Lau, a portfolio manager at Brandes Investment Partners.

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