Group 1 - The global fundamental long/short hedge funds experienced a loss of 50 basis points last week, but gained 103 basis points in June and are up 425 basis points year-to-date [1] - The total leverage ratio for fundamental long/short strategies decreased by 0.3 percentage points to 206.2%, which is in the 94th percentile for the past year, while the net leverage ratio fell by 1.7 percentage points to 50.2%, placing it in the 14th percentile for the same period [1] - Asian emerging markets faced significant net selling, primarily driven by the Chinese market, with hedge funds net selling Chinese stocks for the fourth consecutive week at the fastest pace in two and a half months, entirely driven by short selling [1] Group 2 - Macro products and individual stocks were both net sold, with a roughly equal share in the nominal net selling total; the sectors with the highest net selling were non-essential consumer, essential consumer, healthcare, and financials [2] - H-shares experienced net selling throughout the week, while A-shares and American Depositary Receipts (ADRs) saw relatively smaller net selling [2] - The total holdings/net holdings of Chinese stocks, as a percentage of the total risk exposure of major brokerage accounts, are currently at 4.8% and 6.8%, respectively, which are in the 52nd and 26th percentiles compared to the past year, and in the 11th and 7th percentiles compared to the past five years [2]

Core Viewpoint - The significant increase in short-selling data for Pop Mart and Blok is contrasted with their high market valuations and strong performance, indicating potential concerns about future growth and sustainability in the new consumption sector [1][3][9]. Group 1: Short-Selling Trends - Pop Mart's short-selling shares rose from 563,600 in early May to 1,707,000 by June 11, an increase of over 200% [1]. - Blok's short-selling shares increased from 71,400 on May 16 to 256,800 on June 11, marking a 260% rise [3]. - In contrast, other companies in the new consumption sector, such as Guming and Maogeping, experienced a decline in short-selling volumes [5]. Group 2: Performance and Valuation Concerns - Despite strong performance, the stock price increases for Pop Mart and Blok have potentially overstretched future growth expectations [9]. - The Labubu series from Pop Mart has a secondary market premium exceeding 10 times, raising concerns about valuation fragility [9]. Group 3: IP Dependency Risks - Blok relies on the Ultraman IP for 48.9% of its revenue, with the copyright expiring in 2027, leading to uncertainties regarding renewal costs and alternative IPs [9]. - Pop Mart's Labubu series contributes 23.3% of its revenue, with projected income of 3.04 billion in 2024, but faces challenges in managing the IP lifecycle [9]. Group 4: Market Sentiment and Consumer Behavior - On June 9, the day Blok was included in the Hong Kong Stock Connect, short-selling volume surged by 459%, indicating potential short-term arbitrage opportunities [9]. - Research shows that about 30% of blind box consumers are reducing purchases due to waning novelty, raising concerns about the sustainability of emotional consumption among Generation Z [9].

Group 1 - GameStop Corp is set to announce its first-quarter results on June 10, with a focus on its strategy to invest in Bitcoin [1] - The stock has shown a generally positive trend post-earnings, with five out of the last eight earnings reports resulting in gains, including an 11.7% increase in March [2] - The average next-day price swing for GameStop stock over the last two years has been 13.8%, with current options pricing in a slightly larger move of 14.4% [2] Group 2 - GameStop's stock was trading at $30.44, reflecting a 1.6% increase, while it has gained over 36% in the last nine months [3] - The stock has recently pulled back from its year-to-date peak of $35.81, with support at the 20-day moving average [3] - Short sellers hold 49.52 million shares sold short, representing 12.1% of the stock's available float, indicating a significant bearish sentiment [7] Group 3 - It would take short sellers nearly five days to cover their positions based on GameStop's average trading pace [7] - The Schaeffer's Volatility Index (SVI) for GameStop is at 86%, ranking in the 11th percentile of its annual range, suggesting that options premiums are currently affordable [7]