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Thu 03 Oct 24, 5:35pm (AEST)
Short Selling
Short selling: Lithium shorts ease, Appen shorters cover
By
Kerry Sun
Wed 06 Dec 23, 10:54am (AEST)
Source: Shutterstock
Stocks in article
Key Points
- Short interest in heavily shorted lithium and battery metal stocks decreased slightly this week
- Short sellers are taking profits on stocks that have fallen significantly in recent months
- Appen's share price dropped sharply after the company announced a capital raise at a discounted price
Welcome back to the Short Seller Series, where we delve into the most heavily shorted stocks on the ASX and highlight those with significant changes over the past week.
Short selling data is four days behind today's date because reporting is not mandatory until three business days after the trade. The tables below compare short interest changes between November 22 and November 29.
Most shorted stocks
Heavily shorted lithium and battery metal stocks experienced a small drop in short interest. On Tuesday, Chinese lithium carbonate futures in Guangzhou tumbled 7% to levels not seen since August 2021.
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Pilbara Minerals | 19.25% | 20.36% | -1.11% | |
Syrah Resources | 16.82% | 18.75% | -1.93% | |
Core Lithium | 11.35% | 11.77% | -0.42% | |
Genesis Minerals | 9.52% | 10.43% | -0.91% | |
Sayona Mining | 9.46% | 10.54% | -1.08% | |
Idp Education | 9.21% | 9.86% | -0.65% | |
Flight Centre | 9.07% | 10.55% | -1.48% | |
Bank of Queensland | 8.49% | 8.75% | -0.26% | |
Lendlease | 7.72% | 7.44% | 0.28% | |
Weebit Nano | 7.58% | 8.13% | -0.55% |
Where Are Shorters Covering
Shorters are taking profits on names that have been sold to oblivion. Shares in the top four names – Appen, NeoMetals, AGL Energy and Select Harvests – are down 39.5%, 22.4%, 15.4% and 20.9% respectively, in the past month.
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Appen | 6.64% | 10.68% | -4.04% | |
Neometals | 1.07% | 4.12% | -3.05% | |
AGL Energy | 2.64% | 5.08% | -2.44% | |
Select Harvests | 5.69% | 8.10% | -2.41% | |
ZIP Co | 4.33% | 6.59% | -2.26% | |
Nick Scali | 1.80% | 3.83% | -2.03% | |
Syrah Resources | 16.82% | 18.75% | -1.93% | |
Mesoblast | 6.38% | 8.03% | -1.65% | |
Lake Resources | 2.83% | 4.40% | -1.57% | |
Flight Centre | 9.07% | 10.55% | -1.48% | |
Brainchip | 4.50% | 5.92% | -1.42% |
Appen (ASX: APX) would have been quite the short position after the company's $30 million capital raise at 55 cents per share (42.1% discount) on November 21.
"Revenue conditions have deteriorated further than what was expected at the time of the previous ~A$60 million equity raising ... [the raise] will provide Appen with headroom to return to profitability," the company said in a statement.
Appen shares resumed trading on November 23 and finished the session 35.4% lower to an 8-year low.
Stocks with Rising Short Interest
This week is the complete opposite of last week. We have observed a broad-based rise in short interest (a change of 1%+) across names like AGL Energy, Pilbara Minerals, Zip, AMP and Webjet.
Ticker | Company | Short % | Prev | % Chg |
|---|---|---|---|---|
Healius | 3.80% | 2.66% | 1.14% | |
Unibail-Rodamco-Westfield | 1.93% | 1.56% | 0.37% | |
Grange Resources | 1.27% | 0.93% | 0.34% | |
Bubs Australia | 2.38% | 2.06% | 0.32% | |
Silver Lake Resources | 1.67% | 1.36% | 0.31% | |
Lynas | 5.58% | 5.29% | 0.29% | |
TELIX Pharmaceuticals | 1.99% | 1.70% | 0.29% | |
Lendlease | 7.72% | 7.44% | 0.28% | |
Origin Energy | 0.53% | 0.25% | 0.28% |
Shares in Healius (ASX: HLS) dropped to levels not seen since 1999 after it raised $154 million on November 22 at $1.20 per share or a 34.6% discount to pre-raise prices. The company said proceeds will be used to "deliver a reset of the balance sheet" and reduce its drawn debt by at least $150 million by mid-next year.
The stock finished the session down 27.9% but bounced as much as 32% between November 23 and December 2. But the market appears unconvinced that the worst is over for Healius, with short interest experiencing a small uptick to 3.80%.
Interestingly, consensus target prices for Healius have been slashed by more than 50% from $2.70 to $1.76 in the past two weeks.
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