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Short sellers ramped up their bets against a women's contraception developer following the U.S. Supreme Court ruling last month to reverse its landmark Roe v. Wade decision, new data showed.
According to a report from S&P Global Market Intelligence published Wednesday, short interest in Evofem Biosciences (EVFM) – a pharmaceutical company that offers women reproductive and contraceptive care products – surged to over 50% in the aftermath of the ruling June 24.
Short interest in Evofem was less than 6% mid-June. Shares of Evofem initially more than doubled immediately following the Supreme Court's decision. The stock has dropped 40% from those highs; shares of Evofem are down more than 98% since the company went public in 2018.
For nearly 50 years, the landmark Roe v. Wade decision had secured the federal right to obtain an abortion.
Roughly half of U.S. states moved to ban or limit the procedure following a 6-3 decision that struck down the 1973 case, putting the future of women's reproductive rights into question.
The pileup in short bets made Evofem the second-most shorted company at the end of the month, topped only by ToughBuilt Industries (TBLT).
ToughBuilt saw its short interest exceed 100% of outstanding shares as of the end of June, a level not seen since short interest in GameStop (GME) surged over 100% in October 2020. Short interest in Toughbuilt was just over 1% at the start of the year.
S&P Global Market Intelligence attributed the rise in TougBuilt's short interest to a number of so-called naked short sales, in which a short-sale transaction is conducted without the seller actually borrowing the shares beforehand.
Short sellers typically borrow shares of a company they speculate will drop in price with the goal of purchasing the security back at a lower price and pocketing the difference.
This year's downturn in equity markets has made 2022 a lucrative year across the board for traders betting against the stock market. U.S. equity short-sellers were up 30% for the year through the end of June, according to separate data from research firm S3 Partners.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc