Moderna's stock price nearly tripled, resulting in $5.5 billion in paper losses for short sellers

On August 19, short sellers of Moderna stock incurred approximately $5.5 billion in paper losses after the biotech company’s shares soared nearly 177% following successful results from a skin cancer vaccine trial. As a result, short sellers’ cumulative paper losses on Moderna shares have totaled about $7.7 billion since the beginning of the year, according to S3 Partners.

Moderna's stock rose by nearly 177% at the close of trading on August 19 after the company announced that: the personalized melanoma vaccine it developed in collaboration with Merck was able to reduce the incidence of recurrence among participants in late-stage clinical trials.

The sharp rise in stock prices has resulted in approximately $5.5 billion in paper losses for short sellers of Moderna shares. Since the beginning of the year, their losses from the revaluation of the biotech company’s shares have totaled about $7.7 billion, according to data from S3 Partners cited by Bloomberg.

“For Moderna short sellers, [today’s surge in the stock price] is an exceptionally painful move,” Bloomberg quotes Matthew Unterman, managing director of S3 Partners, as saying. For all traders maintaining “bearish” positions in the company’s stock, Wednesday’s surge significantly altered the risk-reward ratio, the expert believes. According to his data, short positions totaling 20 million Moderna shares had already been closed out by 2026—that was a quarter of all short positions in the stock. Now, the surge in Moderna’s stock price could force the remaining short sellers to reconsider their positions, Unterman added.

At the same time, according to estimates by an S3 Partners portfolio manager, short sellers’ losses could have been even greater. The proportion of short positions in Moderna shares relative to the company’s shares outstanding reached 20% at the beginning of the year but then fell to about 14%—as traders began to close out their short positions.

Even before the results of the melanoma vaccine trial were released, Moderna's stock had already risen by more than 100% since the beginning of the year. Investors were betting that the company’s flu vaccine would help diversify its business amid declining demand for COVID-19 drugs, Bloomberg notes. Prior to this, Moderna’s stock had been falling for four consecutive years—and, before the recent surge, remained nearly 94% below its 2021 peak.

The melanoma vaccine trial appears to be a "landmark victory" for Moderna, according to Needham analyst Joseph Stringer. He says the company's oncology business could now become its next growth driver.

William Blair analyst Miles Minter upgraded Moderna’s stock rating from “market perform” to “outperform” following the release of test results for the new vaccine. "The company now has a clear path to diversifying its revenue beyond its COVID-related business," he noted.

Nevertheless, the overall Wall Street consensus on Moderna shares remains cautious: according to MarketWatch, out of 26 analysts, five recommend buying the company’s stock, while 17 have a neutral “Hold” rating. The remaining four recommend selling the stock.

This article was AI-translated and verified by a human editor