Investors sometimes misunderstand a hedge funds reasoning for shorting a particular stock, its rarely simply because they believe it will fall for say valuation reasons. Usually, it’s because the traders are playing a relative value scenario e.g. Buy Afterpay (APT) and sell Zip (Z1P), a position we are unfortunately on the wrong side of at present. The chart below illustrates how APT has been the shining light over the last 3-4 months but its led to a 5.7% short position in Z1P, one we believe will indeed be squeezed in 2021.
MM remains bullish Z1P
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