Electric vehicle jolts: Stocks that have scorched shorts this year vs. the short winners
TERADAT SANTIVIVUT
S3 Partners Research updated on Wednesday on the short interest backdrop in the U.S. Auto & Truck manufacturing sectors. Ihor Dusaniwsky noted short interest on automaker names is at $43.6B, with about $33.3B of that tally in electric vehicle stocks. The largest short by dollars is Tesla (NASDAQ:TSLA) with $26.3B of short interest with Rivian Automotive Inc (RIVN), NIO Inc ADR (NIO), Lucid Group Inc (LCID) and Li Auto Inc ADR (LI) all distant laggards strictly by dollars. The auto sector continues to be a favorite target of short sellers. Float for automakers at an average of 6.14% is higher than the U.S. market average of 4.99% and average stock borrow costs of 1.49% in fees are almost double the U.S. market average of 0.77% in fees.
There were only five automaker stocks with over $100M of year-to-date mark-to-market profits for shorts, while there were six stocks with over $100M in year-to-date mark-to-market losses. The EV stocks that have been big winners for shorts in 2023 are Mullen Automotive (MULN), Lordstown Motors (OTC:RIDEQ), Faraday Future Intelligent Electric (FFIE), Workhorse Group (WKHS), and Canoo (GOEV). On the flip side, shorts have been scorched this year with trades on Tesla (TSLA), Rivian Automotive (RIVN), Li Auto (LI), XPeng (XPEV), Lucid Group (LCID), Nikola (NKLA), and Electrameccanica Vehicles (SOLO) all highly unprofitable.
Looking ahead, S3 Partners warned on four electric vehicle stocks that are "crowded shorts" based on proprietary data. Fisker (FSR), Hyzon Motors (HYZN), Lucid Group (LCID), and Nikola (NKLA) are seen as the names at risk of being unprofitable trades for the short crowd.
In the broader auto retail sector, highly-shorted Carvana (CVNA) jumped 34.4% in Wednesday morning trading after announcing a cooperation deal with activist investor Elliott Management. Vroom (VRM) broke 17.66% higher.
Long vs. short: Which electric vehicle stocks look to be the best short squeeze candidates or see the juiciest profits for shorts?
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