Short sellers — investors who profit from falling stock prices —are seeing a surge in success in 2025. They gained $159 billion in paper profits over just six trading sessions as escalating trade tensions triggered a drop of more than 10% in the US stock market. The sharp market decline, the steepest since 2022, followed President Donald Trump’s announcement of broad global tariffs. According to S3 Partners LLC, the most lucrative short position during this period was against the SPY ETF, which tracks the S&P Index. Traders betting against this fund have racked up over $6.1 billion in paper gains so far this month, based on an April 8 report from S3.
Short sellers could profit from the sharp intraday market swings that wiped out trillions in value, though their actual gains will depend on when they close their positions. S3 data showed that another $46 billion in new short bets were added in April, raising the risk that these bearish positions could intensify the market’s next major move, particularly if the current downturn reverses and pushes major indexes higher. Ihor Dusaniwsky, managing director of predictive analytics at S3, made the following comment:
“Overall, the short side was an extraordinarily profitable trade up and down the market during this correction. 81% of every short trade was profitable and 97% of every dollar shorted was a profitable trade.”
Another report from S&P Dow Jones Indices noted that the average short interest in US stocks rose to 87 basis points over the past month. The biggest jumps were observed in the Automobiles sector, which climbed by 11 basis points, followed by a 10 basis-point increase in the Commercial and Professional Services sector, and a 9 basis-point rise in the Food and Beverage sector.
Although dividend-paying stocks are generally considered more stable than growth stocks, they have still been subject to short selling throughout history. In their 1998 study Who Trades Around the Ex-Dividend Day?, Jennifer Lynch Koski and John T. Scruggs found unusual trading patterns leading up to the ex-dividend date. They suggested that security dealers might short a stock while it still includes the dividend and then repurchase it after the ex-dividend date if they expect the stock’s price drop to be larger than the dividend amount.
Similarly, in their research paper Tax-Induced Trading Around Ex-Dividend Days, Josef Lakonishok and Theo Vermaelen observed unusual levels of short selling on and shortly after the ex-dividend date. They found that this activity tends to be more pronounced in stocks offering higher dividend yields. Their findings suggest that short sellers aim to minimize the typical price drop that often follows the ex-dividend date.
Amcor plc (AMCR): One of the Cheap Dividend Stocks Being Targeted by Short Sellers
An automated assembly line producing a variety of packaging products.
Our Methodology
For this article, we screened for dividend stocks with more than 3% of their float sold short, using data from Yahoo Finance recorded on April 15. From that group, we picked stocks with dividend yields above 3%, as of April 28. Companies offering high dividend yields are often more likely to attract the attention of short sellers. The stocks are ranked in ascending order of their short % of float.
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Amcor plc (NYSE:AMCR) is an Australian packaging company. In fiscal Q2 2025, the company posted revenue of $3.24 billion, a slight decline of 0.3% compared to the previous year. However, shipment volumes grew by 2.3% year-over-year, building on a 1.6% rise in the first quarter and marking the fourth consecutive quarter of volume gains. Adjusted EBIT, on a comparable constant currency basis, rose about 5% to $363 million.
Looking ahead, Amcor plc (NYSE:AMCR) reaffirmed its full-year outlook, expecting adjusted EBIT growth of 3% to 8% in constant currency terms. It also plans to maintain its leverage ratio at or below 3x by the end of fiscal 2025 and targets adjusted free cash flow between $900 million and $1 billion. It is among the dividend stocks targeted by short sellers.
For the first half of fiscal 2025, operating cash flow reached $228 million, improving from $159 million a year earlier. Amcor plc (NYSE:AMCR) continues to reward its investors with a quarterly dividend of $0.1275 per share and has now increased its payouts for 41 consecutive years. It currently pays a quarterly dividend of $0.1275 per share and has a dividend yield of 5.3%, as of April 28.
Overall, AMCR ranks 6th on our list of the dividend stocks targeted by short sellers. While we acknowledge the potential of AMCR as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than AMCR but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
