(Bloomberg) -- SoftBank Group’s recent rally exposes risks for investors with short positions that have risen to a one-year high.
This is fueling speculation that any forced exit of these positions could drive the stock even higher. Short interest as a percentage of float rose to 2.27% as of Wednesday, the highest level since July 2025, according to data from S3 Partners LLC. The notional short interest value of $3.9 billion is also the most since at least the start of 2015, the data provider said.
Against such bearish bets, the renewed momentum around OpenAI’s new GPT-6 Astra model spurred a 31% gain in shares of the OpenAI investor this month. That generated paper losses of about $1 billion for short sellers this month, bringing mark-to-market losses to roughly $1.2 billion this year, S3 data shows.
“Losses add pressure on managers with short positions, and a further move in price will really ratchet things up,” said Sam Pierson, director of research at S3, adding squeeze risks are at elevated levels.
A potential short squeeze and further gains in SoftBank Group shares could help support the Nikkei 225 at a time when currency volatility and renewed tensions in the Middle East are weighing on investor sentiment. SoftBank has the second-largest weighting in the index, according to the Nikkei website.