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Short sellers effectively borrow a stock from a broker, and go wager it (sell it) on the open market. The plan is to then buy the same stock back later after it’s made a hefty drop in price. That done, the short seller buys it back at the lower price and returns it to the lender.
The difference between the sell price and the buy price is the short seller’s profit. Investors are in effect betting they will fall.
Because shorting is restricted under Australian law (and because it’s an all or nothing bloodsport) any substantial shorting of stocks is worth knowing about, even if you only trade long.
And perhaps there’s method in the madness.
Stockhead has utilised the number of short positions as a percentage of total shares on issue. The most ASX shorted stocks (excluding CDIs) all have 5% or more.
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Short positions | Shares on issue | % short positions |
|---|---|---|---|---|
| PLS | PILBARA MIN LTD ORDINARY | 316,748,111 | 3,007,295,489 | 11% |
| FLT | FLIGHT CENTRE TRAVEL ORDINARY | 21,114,521 | 218,897,036 | 10% |
| SYR | SYRAH RESOURCES ORDINARY | 63,881,401 | 675,897,730 | 9% |
| ELD | ELDERS LIMITED ORDINARY | 14,188,426 | 156,476,574 | 9% |
| CXO | CORE LITHIUM ORDINARY | 168,601,006 | 2,108,516,794 | 8% |
| IEL | IDP EDUCATION LTD ORDINARY | 21,442,838 | 278,336,211 | 8% |
| BRN | BRAINCHIP LTD ORDINARY | 131,139,608 | 1,775,058,145 | 7% |
| SHV | SELECT HARVESTS ORDINARY | 8,883,288 | 121,058,664 | 7% |
| MSB | MESOBLAST LIMITED ORDINARY | 58,956,226 | 814,204,825 | 7% |
| APX | APPEN LIMITED ORDINARY | 11,197,400 | 156,921,599 | 7% |
| SYA | SAYONA MINING LTD ORDINARY | 732,948,171 | 10,293,296,014 | 7% |
| JBH | JB HI-FI LIMITED ORDINARY | 7,632,622 | 109,333,981 | 7% |
| ACL | AU CLINICAL LABS ORDINARY | 13,906,164 | 201,834,015 | 7% |
| BOQ | BANK OF QUEENSLAND. ORDINARY | 45,256,322 | 657,217,431 | 7% |
| LLC | LENDLEASE GROUP FPO/UNITS STAPLED | 47,446,859 | 689,322,065 | 7% |
| HVN | HARVEY NORMAN ORDINARY | 80,524,479 | 1,246,006,654 | 6% |
| DMP | DOMINO PIZZA ENTERPR ORDINARY | 5,715,335 | 89,096,496 | 6% |
| OBL | OMNI BRIDGEWAY LTD ORD US PROHIBITED | 17,909,462 | 280,471,167 | 6% |
| ZIP | ZIP CO LTD ORDINARY | 53,795,000 | 852,752,526 | 6% |
| ARB | ARB CORPORATION. ORDINARY | 4,867,341 | 82,099,299 | 6% |
| TPW | TEMPLE & WEBSTER LTD ORDINARY | 7,244,552 | 122,949,702 | 6% |
| TIE | TIETTO MINERALS ORDINARY | 63,660,925 | 1,087,527,490 | 6% |
| ARU | ARAFURA RARE EARTHS ORDINARY | 122,965,960 | 2,113,364,692 | 6% |
| LKE | LAKE RESOURCES ORDINARY | 82,200,495 | 1,422,444,707 | 6% |
| LIC | LIFESTYLE COMMUNIT. ORDINARY | 5,964,090 | 104,545,131 | 6% |
| VUL | VULCAN ENERGY ORDINARY | 9,007,870 | 168,335,301 | 5% |
| CCP | CREDIT CORP GROUP ORDINARY | 3,599,802 | 68,066,856 | 5% |
| BBN | BABY BUNTING GRP LTD ORDINARY | 7,108,349 | 134,906,489 | 5% |
| LYC | LYNAS RARE EARTHS ORDINARY | 48,621,371 | 933,815,477 | 5% |
| IFL | INSIGNIA FINANCIAL ORDINARY | 34,397,833 | 662,598,242 | 5% |
| BRG | BREVILLE GROUP LTD ORDINARY | 7,367,250 | 143,425,348 | 5% |
| WBT | WEEBIT NANO LTD ORDINARY | 9,213,799 | 187,481,064 | 5% |
| IMU | IMUGENE LIMITED ORDINARY | 331,496,949 | 6,834,259,350 | 5% |
| 29M | 29METALSLIMITED ORDINARY | 31,583,755 | 659,518,854 | 5% |
| A2M | THE A2 MILK COMPANY ORDINARY | 34,428,178 | 722,934,808 | 5% |
| AMA | AMA GROUP LIMITED ORDINARY | 50,974,425 | 1,073,070,217 | 5% |
| CHN | CHALICE MINING LTD ORDINARY | 18,353,288 | 388,963,304 | 5% |
| BET | BETMAKERS TECH GROUP ORDINARY | 43,538,727 | 943,541,600 | 5% |
Pilbara Minerals (ASX:PLS) has become the most shorted stock on the ASX. Its short position is 11% as short sellers also target other lithium stocks including Core Lithium (ASX:CXO), Sayona Mining (ASX:SYA), and Lake Resources (ASX:LKE).
Short sellers seem concerned lithium prices could fall in the coming years with forecasts of surplus of the battery mineral as more lithium mines globally come into production.
As Stockhead’s Josh Chiat noted last year, lithium stocks banked incredible margins as prices charged to unforeseen levels as a shortage of supply ran up against a 50% rise in electric vehicle sales.
Prices ran up to over US$80,000/t in China for downstream chemicals and US$8000/t for spodumene concentrate.
But they’ve since fallen to about US$30,000/t and US$3500/t respectively, still portending extraordinary margins for producers like PLS, which had $3.3 billion of cash sitting in its bank account at June 30 after a record year of volume and prices at its Pilgangoora mine in FY23.
However, with signs of China’s economy faltering and its EV demand moderating, there are concerns about a drop off in lithium prices.
Syrah Resources – (ASX:SYR) has also been targeted by short sellers. Weak graphite prices have been having a negative impact on SYR’s performance, with its share price down more than 70% YTD.
After hitting turbulence with short sellers for much of 2022 and 2023 as the ASX’s most shorted stock, Flight Centre (ASX:FLT) is still holding second place, where it has sat since August.
FLT reported a big turnaround in its profits in FY23, citing a strong recovery in the travel sector from the Covid-19 pandemic and improved trading conditions during the year.
The company had an increase of 112% in total transaction value (TTV) growth to $22 billion – its second strongest result achieved on record.
IDP Education (ASX:IEL) is also still one of the most shorted stocks on the ASX despite releasing a strong FY23 result including record revenue of $982 million, up 24% on FY22. IEL specialises in international student placement services and high-stakes English language testing.
The company says the strong revenue results were driven by student placement revenue growth of 63% on FY22.
Tech and AI play BrainChip Holdings (ASX:BRN) is also on the list of most shorted ASX stocks. BRN is involved in neuromorphic computing, which is a type of AI that simulates the functionality of the human neuron and is working on commercialisation of its Akida chip.
The company was removed from the S&P ASX 200 in the September rebalance just 15 months after being admitted in June 2022, with its share price falling more than 60% YTD.
BRN reported its H1 FY23 recently including revenue of just US$115,606, down 98% from $4.8 million on pcp. Total expenses were up 30% to US$16.85 million.
Domino’s Pizza (ASX:DMP) is out of favour – or should we say ‘flavour’ – with short sellers. CEO Don Meiji’s came under fire recently for trying to offset some inflation-fuelled rising costs by passing the cost onto deliveries.
That just stopped people ordering, moving DMP from a consumer staple to a consumer discretionary.
Costs rose, FY23 net profit performed a 74% cliff dive and punters had to live with reduced dividend. To get back on track DMP announced mass job cuts in August which the market reacted to favourably. The DMP share price is up ~5.67% in the past month.
Cost of living pressures inflation and higher interest rate hikes has also seen several ASX consumer discretionary stocks remain on the short sellers’ list including JB HiFi (ASX:JBH), Temple & Webster (ASX:TPW), Harvey Norman Holdings (ASX:HVN), and Baby Bunting (ASX:BBN).
Fintechs Zip Co (ASX:ZIP) and EML Payments (ASX:EML) also remain on the watchlists of short sellers along with some biotechs including Mesoblast (ASX:MSB) and Australian Clinical Labs (ASX:ACL).
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