Pop Mart Short Interest Rises to 12.67% Despite Losing Trade

Short sellers are betting more against Pop Mart, even though those bets are losing money. The Chinese toymaker's shares have climbed 8% from their April low. "Pop Mart stands out as the only stock on the list where shorts are losing money," said Matt Chessum, executive director at S&P Global Market Intelligence.

The Losing Trade

But the share price has partially recovered - gaining 8% since its year-to-date low in April - leaving Pop Mart as the sole entry among Hong Kong's ten most heavily shorted stocks where bears are currently underwater, per S&P Global Market Intelligence.

Why Bears Are Not Backing Down

Skeptics point to signs of cooling demand overseas, especially for the Labubu toy line. Melinda Hu, an analyst at Bernstein, said management's "pit stop year" framing signals slower growth. "Management's 'pit stop year' framing, emphasis on quality over quantity, and organizational restructuring all signal decelerating growth," she said. Pop Mart chairman Wang Ning described 2026 as a year to pause and refuel. He said it is like "pausing in the pit lane to refuel and replace tyres."

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Hu also noted that overseas markets lack the same buildup of teams and fan bases as in China. That "validates underlying weakness," she said. On the other side, Citigroup analyst Lydia Ling kept a buy rating and a target price of 263 Hong Kong dollars. Ling believes the company's long-term prospects are supported by its intellectual property creation and global reach, though she acknowledges short-term turbulence in foreign markets as a risk.

Worth Noting

"The execution of new shorts will become more challenging," while fees remain high, said Chessum.

Meanwhile, analysts will watch overseas sales and whether Pop Mart can execute its consolidation strategy. Short sellers may be trapped, but the trade is far from over.

The Bigger Picture

The standoff between bears and bulls hinges on how Pop Mart's overseas expansion plays out. The company's blind-box model generated explosive growth in China, but replicating that success abroad requires building fan communities from scratch. The business model relies on surprise-packed figurines that drive repeat purchases, yet cultural differences and distribution challenges in new markets create uncertainty. Pop Mart's pivot toward physical stores and local partnerships aims to bridge that gap, but results remain mixed.

Conversely, if demand for Labubu and other lines continues to cool, the stock may slide further toward its lows. The next quarterly update will be critical in resolving this tug-of-war.

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