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Toronto-Dominion Bank (The) (TD)
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Q: Tonight, I saw on TV that TD has become the target of short sellers.
Is this something to be worried about?

Asked by John on May 01, 2023

5i Research Answer:

TD has become a short target for three main reasons: One, US shorters like to bet against the Canadian housing market. It has been a theme now for multiple years. Two, TD is in the midst of acquiring FHN, a US regional bank. It is a share acquisition and arbitrageurs can short the bank against FHN shares. Three, TD owns part of SCHW, which has been the subject of liquidity rumours. But on a total basis, only 4% of TD shares have been shorted, versus about 2% for RY. It is more of a media story; we would not consider 4% that noteworthy.

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