Short Selling

Short Selling Report: MorphoSys (MOR:GR)

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MorphoSys
(MOR:GR)
12 months:
-57%
Activity:
Bearish
Pattern:
High short interest
News:
Cut 2021 outlook
MorphoSys
(MOR:GR)
12 months:
-57%
Activity:
Bearish
Pattern:
High short interest
News:
Cut 2021 outlook

Short selling data can help investors avoid losses. Short sellers tend to do their research. If they’re targeting a stock, there’s usually a good reason they are doing so.

In this report, we are going to look at the short selling data on MorphoSys AG (MOR:GR). MorphoSys is a biopharmaceutical company that develops and commercializes antibodies for therapeutic applications. Founded in 1992, it has nearly three decades of experience in antibody technology. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €1.48 billion.

MorphoSys: Short Selling Activity

An analysis of the short selling data on MorphoSys reveals that since the start of June, short interest has increased significantly.

At the start of June, only three managers had disclosed positions above the regulator’s required threshold of 0.50% of shares outstanding, collectively shorting 605,189 shares or 1.84%. However, since then, the number of shorted shares has increased by more than 2.5 times to 1.72 million, worth €81.03 million as per the closing price on 30 July of €46.97.

The recent increase in the number of shorted shares has made MorphoSys the fourth most shorted stock in Germany behind Encavis AG, S&T AG, and Deutsche Lufthansa AG.

Since the short sellers have increased their short bets, the company’s share price has fallen substantially. In the past month, the stock is down more than 30%.

Disappointing 2021 Guidance

On 26 July, MorphoSys provided the market with disappointing guidance for 2021. The company advised that, based on the preliminary unaudited consolidated results for the first six months 2021, it now expects group revenues for the year of between €155 million to €180 million. Previous guidance, provided in March, was €150 million to €200 million. It also said that it now expects group operating expenses to be in the range of €435 million to €465 million. Its previous guidance was €355 million to €385 million.

Then, on 28 July, the group provided a disappointing update for the first half of the year. For H1, revenue came in at €85.4 million, down 68% year on year. Meanwhile, the company posted a net loss of €20.7 million, versus a profit of €179.8 million in the same period last year.

The increase in short interest here suggests that hedge funds expect the company to continue experiencing challenges. Given that seven funds are currently shorting the stock, we think caution is warranted towards MorphoSys right now.

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