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Short Selling
Bearish Bets: Lithium shorts won’t back down, NextDC short covering
By
Kerry Sun
Thu 13 Apr 23, 3:17pm (AEST)
Source: iStock
Stocks in article
Key Points
- Short interest on Core Lithium and Sayona remains mostly unchanged post Liontown bid
- Liontown and United Malt Group shorts retreat
Welcome back to the Short Seller Series – where we take a look at some of the most shorted stocks in the ASX and those that have experienced a notable rise and fall in short interest.
Most shorted stocks
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Flight Centre | 11.70% | 11.45% | 0.25% | |
Megaport | 10.32% | 9.23% | 1.09% | |
ZIP Co | 10.04% | 9.88% | 0.16% | |
Core Lithium | 9.58% | 10.17% | -0.59% | |
Sayona Mining | 8.94% | 8.66% | 0.28% | |
Temple & Webster | 7.57% | 6.89% | 0.68% | |
Pointsbet | 7.37% | 6.98% | 0.39% | |
Breville Group | 7.30% | 6.61% | 0.69% | |
AMA Group | 7.24% | 6.70% | 0.54% | |
Brainchip | 7.15% | 7.34% | -0.19% | |
NEXTDC | 7.05% | 6.63% | 0.42% |
The most shorted list continues to show some incremental moves here and there but thematically remains focused on lithium, unprofitable tech and cyclical plays.
Some interesting observations include:
Flight Centre has remained one of the most shorted stocks since the beginning of the pandemic. But short interest against the sector is picking up, with the US Global Jets ETF – which reflects the performance of various global airlines – has climbed to more than 10% of the float, the highest since March 2020, according to Bloomberg
Lithium shorts (minus Liontown) have hardly moved following the Albemarle bid on Tuesday, 28 March. Chinese lithium carbonate prices are down more than 60% year-to-date, falling to 215,000 yuan a tonne in April, the lowest in 17 months
NextDC shares surged 8.1% on Wednesday, 12 April after announcing a “record level of incremental customer contract wins” since December 2022. It’s currently the 11th most shorted stock, so does this prompt some short covering?
Short risers
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Jervois Global | 6.07% | 3.77% | 2.30% | |
Megaport | 10.32% | 9.23% | 1.09% | |
EML Payments | 4.48% | 3.46% | 1.02% | |
Magnis Energy Technologies | 1.07% | 0.13% | 0.94% |
The stocks that have experienced some volatile price action include:
EML Payments: Rallied 31% on Friday, 31 March after confirming that the Central Bank of Ireland will not impose a growth cap on its Irhs subsidiary.
Megaport: Rallied 7.7% on the same day that NextDC announced the positive trading update on Wednesday 12, April
Jervois Global: Shares tanked as much as 50% between 29-30 March after suspending the final construction of its Idaho Cobalt Project due to low cobalt prices and inflation
Short fallers
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Liontown Resources | 5.92% | 9.03% | -3.11% | |
United Malt | 2.44% | 5.33% | -2.89% | |
Weebit Nano | 2.26% | 4.26% | -2.00% | |
Betmakers Technology | 5.97% | 7.33% | -1.36% | |
29METALS | 4.31% | 5.47% | -1.16% | |
Downer Edi | 5.43% | 6.45% | -1.02% | |
JB Hi-Fi | 6.91% | 7.79% | -0.88% |
Unsurprisingly, the two stocks that received takeover bids experienced the largest decline in short interest in the past week.
This was followed by an interesting mix of:
Weebit Nano and Betmakers: Two speculative tech plays
29Metals: A copper miner that rallied 13% on Wednesday, 12 April after announcing positive copper, silver and cobalt drilling at its Capricorn Project
Downer EDI: The stock flopped -23.7% during its half-year result on 27 February but its now making a slow climb back towards pre-result levels
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