Investors dumped heavily shorted stocks in Europe Thursday in a bid to profit from share prices that have been pumped up by groups of retail traders.
Pearson, a British publishing company, declined nearly 7% after soaring close to 14% on Wednesday. Shares in German drugmaker
were down as much as 4% after rising close to 10% both of the previous two days. Both are among the most-shorted stocks in Europe, with short interest close to 15%, according to data from
French commercial-real-estate firm
fell 3% after jumping over 20% Wednesday.
“You see the unexpected spikes in some targets for WallStreetBets and you think, ‘I’ve hit my target price early, I’ll take it’—if you act quickly enough,” said Lewis Grant, an equities portfolio manager at Federated Hermes.
“We’ve also seen some of these names spike for an hour and then collapse. That volatility is hard to time,” he said.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
