Short Sellers Bet Against Blackstone and Starwood Mortgage REITs
Real estate investment trusts (REITs) have been a popular investment vehicle for many years, and the recent surge in the stock market has only increased their appeal. However, some investors are taking a different approach and betting against two of the largest REITs in the market: Blackstone Group and Starwood Property Trust.
What is Short Selling?
Short selling is a trading strategy that involves selling borrowed shares of a stock in the hope that the price will fall. If the price does fall, the investor can then buy back the shares at a lower price and pocket the difference. It is a risky strategy, as the investor can potentially lose money if the stock price rises instead of falling.
Short Sellers Bet Against Blackstone and Starwood
Short sellers have been targeting Blackstone and Starwood in recent weeks. According to data from financial analytics firm S3 Partners, short interest in Blackstone has risen from $1.2 billion in March to $2.2 billion in April. Short interest in Starwood has also risen from $1.1 billion in March to $1.7 billion in April.
The increase in short interest suggests that investors are betting that the stocks of both companies will fall in the near future. This could be due to a variety of factors, including concerns about the potential impact of rising interest rates on REITs, or worries about the potential for a slowdown in the housing market.
Blackstone and Starwood React to Short Selling
Blackstone and Starwood have both taken steps to protect their stocks from short sellers. Blackstone has implemented a “stockholder rights plan,” which is designed to make it more difficult for short sellers to profit from their bets against the company.
Starwood has also taken steps to protect its stock, including a “poison pill” provision that would make it more difficult for short sellers to profit from their bets against the company.
The Impact of Short Selling on REITs
Short selling can have a significant impact on REITs, as it can drive down the price of the stock and make it more difficult for the company to raise capital. This can make it more difficult for the company to invest in new projects or acquisitions, which can have a negative impact on the company’s long-term prospects.
However, it is important to note that short selling is not necessarily a bad thing. Short sellers can provide valuable information to the market by betting against stocks that they believe are overvalued. This can help to keep stock prices in check and prevent them from becoming too inflated.
The Bottom Line
Short sellers have been betting against Blackstone and Starwood in recent weeks, and both companies have taken steps to protect their stocks from short sellers. While short selling can have a negative impact on REITs, it can also provide valuable information to the market and help to keep stock prices in check.