Moderna Soars 177% as Short Sellers Reel from $5.5 Billion in One-Day Losses

As Moderna shares soared by nearly 180%, short-selling investors reportedly suffered losses amounting to 5.5 billion dollars. With the outlook for Moderna's growth improving after clinical trial success, analysts say the pressure on short-sellers could intensify further.

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According to Bloomberg on the 19th (local time), citing data from S3 Partners, the sharp rise in Moderna's stock price led to an estimated mark-to-market loss of about 5.5 billion dollars for short-selling investors, with year-to-date losses reaching approximately 7.7 billion dollars. Listed on the Nasdaq, Moderna finished trading at $174.38, up $111.42 from the previous session. The share price gained 176.97%, setting a new year-to-date closing high.

Matthew Unterman, Executive Director at S3 Partners, commented, "This surge has dealt a highly unusual blow to investors betting on a decline in Moderna's share price," adding, "The relationship between risks and expected returns for maintaining a bearish position has fundamentally changed due to today's price movement."

Moderna's share price had been declining for several years as demand for COVID-19 vaccines waned. However, even before the latest clinical trial results were announced, the stock had already risen 114% year-to-date, showing strong momentum. Bloomberg analyzed that investors have been actively purchasing Moderna shares amid expectations that its flu vaccine will serve as a new growth driver.

The main catalyst driving Moderna's share price higher was the clinical success of its cancer vaccine. Moderna and Merck reported that the personalized messenger RNA (mRNA) cancer vaccine significantly improved the primary endpoint—recurrence-free survival—in phase 3 clinical trials involving high-risk melanoma patients, and also showed meaningful improvement in the key secondary endpoint—distant metastasis-free survival. The two companies conducted the trial by comparing a combination regimen of their personalized vaccine ‘intismeran autogene’ with Merck's immunotherapy ‘Keytruda’ versus Keytruda alone among over 1,100 high-risk patients who had undergone melanoma resection surgery.

Wall Street also sees the clinical trial outcome as a potential new growth engine for Moderna. Joseph Stringer, analyst at Needham, described this melanoma trial as a "monumental achievement" for Moderna, projecting that its cancer drug business could become the company’s next pillar of growth.

Myles Minter, analyst at William Blair, raised his investment rating on Moderna from "market perform" to "outperform." He explained that Moderna has secured a clear pathway to reduce its reliance on the COVID-19 vaccine business while diversifying its revenue streams.

With Moderna's share price surging and its future outlook remaining positive, there are analyses suggesting that short-selling investors may be forced to reassess or reduce their positions. According to S3 Partners, at one point early this year, the short interest as a percentage of Moderna's float surged to 20%, but as some investors closed their bearish bets, that figure has now dropped to about 14%.

Executive Director Unterman noted, "The impact of this surge is all the greater because it came amid a period when short positions were already being reduced," adding, "Since the beginning of the year, roughly 20 million shares—equivalent to about a quarter of all short positions—have already been covered." He continued, "A price surge of this magnitude will pressure remaining short-sellers to review or trim their positions as well."

This content was produced with the assistance of AI translation services.