Investors worried about the tech-focused SVB Financial ‘s plans to raise funds sent Shares tumbling there, but short sellers have targeted some other banks too, data shows. Crypto-focused bank Silvergate Capital was the most shorted stock among regional and national banks on February 28, according to the latest industry data compiled by FactSet. Short-sellers profit when stocks fall. They borrow stocks to sell immediately with a plan to buy them back when the price is lower, profiting from the difference. Short sellers hold more than two-thirds of Silvergate’s shares, betting on further declines in the share price – despite a 90% slump in the past 12 months. Earlier this week, shares in the bank fell 36% after the creditor of the crypto industry said it was winding down operations and liquidating its bank. The table below shows the 15 stocks with the highest share percentage. Selling on Wall Street gained steam on Friday after SVB Financial revealed plans to raise more than $2 billion in capital in a bid to offset losses from bond sales. The announcement led to a sell-off in the financial sector as investors grew concerned that higher interest rates would cause banks to incur loan losses due to defaults. The financial sector was the worst performer in the S&P 500 on Thursday, posting a 4.1% decline – the worst day since 2020. More than 5% of Silicon Valley Bank shares, valued at $340 million, were held, FactSet data revealed. New York-based Signature Bank, another larger crypto lender than Silvergate Capital, is also a target with 6% of its shares, or $344 million, held in short positions. Short interest in dollar value Investors should understand that short interest as a percentage of shares can only be a useful metric for comparing companies of the same size, according to Ihor Dusaniwsky, managing director of short interest data provider S3 Partners. Dusaniwsky explained that a more reliable metric for determining how many bets are sold on a security relative to other stocks is total short interest, which takes into account the number and value of those bets. For example, 20 $5 chips may seem like a big bet compared to five $100 chips; However, it is the latter truth that conveys more risk and conviction on behalf of investors, he added. Ally Financial and First Horizon are the two banks on the list with the highest percentage of shares held short and the largest short interest in dollar terms. Ally Financial was previously downgraded by equity analysts at Barclays and Morgan Stanley over concerns that high inflation, rising unemployment, and lower savings would lead to higher credit losses. America’s largest bank, JPMorgan Chase, is the most short bank in terms of dollar value. – CNBC’s Rohan Goswami, Ari Levy, and MacKenzie Sigalos contributed reporting.