Investors running bets against renewable energy stocks have racked up profits of more than $1.2bn from the heavy sell-off that swept the sector in the wake of Donald Trump’s US presidential election victory.
Arrowstreet Capital and Qube Research & Technologies were among firms that had built up short positions against companies such as Norwegian hydrogen firm Nel and German wind turbine manufacturer Nordex, according to data group Breakout Point.
Shares in these companies fell sharply on Wednesday amid concerns that the president-elect will “terminate” President Joe Biden’s Inflation Reduction Act, a move that could result in a halt to tax credits, and pull the plug on offshore wind development.
Hydrogen producer Plug Power and solar developer Sunrun, both of which have been heavily shorted by hedge funds, fell 22 per cent and 30 per cent, respectively, as investors fled stocks likely to be hit by Trump’s plans. The two US stocks together generated around $350mn in profits for short sellers, according to calculations by data group S3 Partners.