The short sellers of the largest shipping stocks are facing a counterattack! From the crisis in the Red Sea to the tariff game, despite the unpredictable changes in the shipping industry, Maersk's rising trend is unstoppable.

Shorting the stock of Maersk, the world's largest publicly traded shipping company, during the global trade war seemed like a surefire trade. However, it turns out that investors who heavily bet on this trade since April have incurred huge losses. According to data from S&P Global Market Intelligence, currently about one-third of the free-floating shares of A.P. Moller-Maersk A/S have been borrowed, marking the highest level of short interest since data collection began in 2014. This indicator shows that short positions in the market have surged this year, with a significant increase of about 15% since President Donald Trump announced his comprehensive plan to impose reciprocal tariffs on all U.S. trade partners in early April. Following the initial drop when tariffs were announced on April 2, the stock has risen by approximately 50% from its lows in April. Despite the Trump administration's recent tariff policy changes since August, which significantly reduced the aggressive reciprocal tariffs announced in April, this Copenhagen-based international shipping giant has shown no signs of being hurt by these tariff restrictions. The company even raised its financial performance expectations for 2025 when it reported earnings last Thursday, citing resilient global transportation demand outside the U.S. A spokesperson for Maersk declined to comment on the stock price and the short position of the stock. The short interest in Maersk continues to grow - as Trump's tariff policy shifts, Maersk's short interest surges "The short interest is basically betting that Trump's tariff policy will slow down global economic growth, but we have yet to see that happen as the economic growth engine is still running," said Lars Hytting, an investment strategist at ArthaScope, a holding company that owns Maersk shares, in an interview. "And Maersk is showing the best performance compared to its peers in this scenario." It's not just the shorts who have lost their minds, even Wall Street analysts are collectively bearish on Maersk This global trade war is still in its early stages, giving shorts plenty of time to cash in. Trump has only recently finalized trade agreements with many of the U.S.' long-term trading partners, and some important negotiations are still ongoing. Maersk has warned that if consumer confidence drops, and consumption weakens, the tariff policy will inevitably have negative impacts on its business. It's worth noting that most of Wall Street analysts covering the stock are pessimistic about the company's long-term prospects, with an average 12-month target price showing the company's stock could fall by about 15% from its current levels. However, Maersk CEO Vincent Clerc has repeatedly pointed out that tariffs are unlikely to stop global trade, as many products are difficult to replace with local alternatives. For example, nearly all sneakers globally are produced in just three Asian countries - China, Vietnam, and Indonesia - establishing a domestic sneaker production chain in the U.S. would require high costs and years of effort. "Things are getting more volatile and complex, but this presents us with significant market opportunities," Clerc said during a performance presentation in Copenhagen on August 7. "This presents positive potential for our multinational logistics transport business, as the more complex things get and the more supply chains need to change, the greater our value to customers." In reality, after experiencing major negative events worldwide, shipping stocks quickly head towards a new period of prosperity Maersk's stock price and market value continue to expand even in the face of the biggest negative impact on free trade in decades, as seen in this recent global event that initially appeared negative but eventually led to sustained benefits for shipping stocks. When the Red Sea was disrupted by geopolitical conflicts at the end of 2023, forcing container shipping companies to divert around the southern tip of Africa, international shipping prices quickly soared because the longer route actually reduced the global shipping fleet by about 7-8%. A similar supply-demand imbalance occurred in 2021 when a large container ship blocked the Suez Canal, significantly aiding industry growth. During the early stages of the global COVID-19 pandemic, shipping stocks initially plummeted to record lows, but investors later realized that the unprecedented economic recovery pace post-global economic reopening was a major boost for shipping companies, benefiting from increased demand for consumer goods. Maersk's recovery - after the "day of liberation" crash, the stock regains lost ground and more According to data from the Danish Financial Supervisory Authority, when the company raised its performance guidance last week, Marshall Wace LLP was the only hedge fund company holding a short position of more than 0.5% of the total share capital of Maersk, with a position of about 0.59%. A spokesperson for Marshall Wace declined to comment. Mads Zink, stock manager at Denmark's largest commercial bank, Danske Bank, said that the main logic behind shorting Maersk is not based on performance fundamentals, but mainly on its currently high valuation, and some institutional investors using it as a primary short trade to bet that Trump's tariff policy will ultimately damage the global trade situation. "In some ways, their short thesis might be right, but Maersk's stock price hasn't developed as they hoped this summer," Zink said in an interview. "So far, the logic of those investors shorting the stock has not been proven to be correct."