Goldman Sachs (GS) on Tuesday completed a discounted $5bn share placing, pushing shares in the US bank lower in early trading, according to the FT.
Despite a recent increase in the percentage of GS on loan to short investors - a rise from 1.5% on April 6 to 2% now, short interest has remained under 3% for the last three months, and has moreover not surpassed 4% since last autumn. As you can see from this chart which documents the percentage of GS' shares on loan (pale blue line) vs the price (purple), there has been a steady amount of short covering over the last three months, presumably as the market assumed that good news was on the way for the Investment Bank as the price started to rise in late January, from $60 then to $120 now.
There has been a recent rise in the amount of Wells Fargo (WFC) that is on loan, rising from 1% to 3.5% since March 3. The share price has has also slightly doubled in recent times, from $10 in early March to $20 now.
There has been a marginal amount of short covering in JPMorgan Chase, down from 1.4% in late February to 0.9% Easter, and then back up to 1% now. The share price has risen as investors take profits, from $15 to $35 in the last six weeks, after the fall from $40 to $15 between October and early March.