By Eric Martin
Dec. 9 (Bloomberg) -- Citigroup Inc. had the biggest increase in shares sold short among New York Stock Exchange companies in the second half of November as the world’s biggest financial-services company tumbled 60 percent on concern about toxic assets and a capital shortage.
Citigroup short selling increased by 56.1 million shares, or 44 percent, to 182.5 million shares between Nov. 14 and Nov. 28, according to exchange data compiled by Bloomberg. Citigroup dropped to a 15-year low of $3.77 on Nov. 21, two days before the firm received a $20 billion capital injection from the U.S. government. The stock then more than doubled through Nov. 28 and added 7 cents to $8.54 today.
U.S. stocks fell in the first half of the period covered by the NYSE report, with the Standard & Poor’s 500 Index falling 14 percent through Nov. 20 before rebounding 19 percent.
In a short sale, a trader tries to profit from a price decline by selling borrowed shares in the hope of repaying the loan with cheaper stock.
Short selling of Bank of America Corp., the nation’s third- largest lender, rose by 18.9 million shares for the second- biggest jump among stocks listed on the NYSE. Bank of America retreated 31 percent from Nov. 14 through Nov. 20 before rebounding 44 percent following Citigroup’s rescue. Bank of America lost 89 cents, or 5 percent, $16.95 today.
Borrowed shares of Alcoa Inc., the largest U.S. aluminum producer, increased 29 percent to 61 million as the industrial metal fell to a three-year low. Alcoa lost 0.7 percent overall during the period and dropped 3 cents to $9.55 today.
Short selling of Procter & Gamble Co., the world’s largest consumer-goods company, declined the most among NYSE companies, dropping by 35.9 million shares, or 50 percent, to 36.5 million. The Cincinnati-based company had the biggest increase in shares sold short in the first half of the month.
To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.
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