Short & Caught: Popular lithium plays among most shorted ASX stocks

Flight Centre remains most shorted ASX stock but its short position improves heading into spring
Popular lithium plays are among the most shorted ASX stocks, including Lake Resources and Core Lithium
BNPL and health stocks see their short positions drop in September, while rate sensitive companies increase

How does shorting work?

Shorting works by selling stocks you do not actually own in the hope of buying them back at a lower price. Investors are in effect betting they will fall.

Because shorting is restricted under Australian law, any substantial shorting of stocks is worth knowing about, even if you only trade long.

Stockhead has utilised the number of short positions as a percentage of total shares on issue. The most shorted ASX stocks all have 5% or more.

Code	Company	Short positions	Shares on issue	% short positions
FLT	FLIGHT CENTRE TRAVEL ORDINARY	30,775,136	200,033,998	15.38%
BET	BETMAKERS TECH GROUP ORDINARY	124,940,841	904,456,199	13.81%
LKE	LAKE RESOURCES ORDINARY	140,652,375	1,389,973,709	10.12%
SQ2	BLOCK CDI 1:1 NYSE	3,752,171	37,614,529	9.98%
ZIP	ZIP CO LTD	67,622,580	687,983,539	9.83%
CCX	CITY CHIC COLLECTIVE ORDINARY	21,957,125	231,920,086	9.47%
DEG	DE GREY MINING ORDINARY	124,525,171	1,410,667,806	8.83%
NAN	NANOSONICS LIMITED ORDINARY	26,308,199	301,947,936	8.71%
EML	EML PAYMENTS LTD ORDINARY	29,282,328	373,651,038	7.84%
RRL	REGIS RESOURCES ORDINARY	58,085,134	755,025,925	7.69%
TPW	TEMPLE & WEBSTER LTD ORDINARY	9,284,995	120,893,504	7.68%
PBH	POINTSBET HOLDINGS ORDINARY	22,956,302	305,635,657	7.51%
MP1	MEGAPORT LIMITED ORDINARY	11,637,060	158,135,249	7.36%
BRG	BREVILLE GROUP LTD ORDINARY	10,396,344	142,459,749	7.30%
92E	92ENERGY ORDINARY	5,653,766	81,878,696	6.91%
PNV	POLYNOVO LIMITED ORDINARY	45,467,654	661,688,044	6.87%
BGL	BELLEVUE GOLD LTD ORDINARY	71,729,998	1,045,377,255	6.86%
KGN	KOGAN.COM LTD ORDINARY	7,138,656	107,044,098	6.67%
VUL	VULCAN ENERGY ORDINARY	9,412,498	143,335,301	6.57%
PNI	PINNACLE INVESTMENT ORDINARY	13,043,074	199,562,935	6.54%
APX	APPEN LIMITED ORDINARY	7,998,594	123,446,356	6.48%
CUV	CLINUVEL PHARMACEUT. ORDINARY	3,142,917	49,410,338	6.36%
MFG	MAGELLAN FIN GRP LTD ORDINARY	11,620,276	184,883,839	6.29%
AMA	AMA GROUP LIMITED ORDINARY	65,368,489	1,073,070,217	6.09%
WEB	WEBJET LIMITED ORDINARY	22,178,392	380,851,484	5.82%
UMG	UNITED MALT GROUP ORDINARY	16,163,022	299,179,135	5.40%
IMU	IMUGENE LIMITED ORDINARY	313,123,054	5,866,594,610	5.34%
IEL	IDP EDUCATION LTD ORDINARY	14,693,667	278,336,211	5.28%
CXO	CORE LITHIUM ORDINARY	90,726,531	1,737,195,356	5.22%
BRN	BRAINCHIP LTD ORDINARY	88,161,601	1,719,362,144	5.13%
ASM	AUSTRALIAN STRATEGIC MATERIALS ORDINARY	7,168,722	142,956,062	5.01%
RBL	REDBUBBLE LIMITED ORDINARY	13,782,372	275,920,223	5.00%

A little less turbulence for Flight Centre

After remaining the most shorted ASX stock on the ASX in FY22, Flight Centre (ASX:FLT) is still having a turbulent flight with short sellers in the first quarter of FY23.

FLT remains the most shorted stock on the ASX but its short position is continuing to slightly improve. FLT recently reported its FY22 results, flagging a $183.1m underlying EBITDA loss – a 46% improvement on the $337.8 million FY21 result.

The FLT share price is down more than 8% year to date.

Gambling on BetMakers losses

The second most shorted stock on the ASX is wagering tech company Betmakers Technology Group (ASX:BET) with its short position up from ~12% in August. Betmakers recently reported a 371% increase in revenue in FY22 to $97.1m compared to FY21. Bottom line adjusted EBITDA was $2.2m, a $3m decline from FY21.

Online sports betting company Pointsbet (ASX:PBH) has also seen its short position increase from 6.30% in August. Pointsbet posted a 52% jump in revenue but its EBITDA losses deepened to ~$243.6 million. The company intends to continue growing in the US in the current financial year

The PBH share price is down ~66% year to date.

Lithium and gold stocks shorted

Short sellers are also looking at lithium and and gold stocks. De Grey Mining (ASX:DEG) has seen its short positioned increased from 5.87% in August, despite as Stockhead’s Josh Chiat pointing out its Hemi find in WA’s Pilbara gold fields is tipped to live up to the early hype.

The gold producer recently announced its Hemi project as a future Top 5 gold mine with PFS outlining plans to produce 550,000oz of gold a year.

Other gold stocks shorted include Bellvue Gold (ASX:BGL) and Regis Resources (ASX:RRL).

Popular traded stock on online trading platform Stake Lake Resources (ASX:LKE) along with near-term producer Core Lithium (ASX:CXO) also remain on the short sellers list, although their positions have fallen from last month.

Core Lithium has ‘mutually’ agreed to extend the termination date for its binding offtake term sheet with Tesla to October 26.

The company’s share price is up more than 165% year to date.

BNPL and health stocks remain heavily shorted

It’s been a tough year for BNPL stocks and while the short position of Block Inc (ASX:SQ2) is on the improve from 11.47% in August, short sellers have increased the position of Zip Co (ASX:ZIP) from 8.30% in August.

Nanosonics (ASX:NAN), Polynovo (ASX:PNV), Imugene (ASX:IMU) and Clinuvel Pharmaceutical (ASX:CUV) also remain heavily shorted, although their short positions have improved in September.

Rate sensitive stocks make list

Short traders are continuing to bet that pandemic-era sharemarket darlings will feel the heat of surging inflation, rising interest rates and falling household wealth on their earnings.

Among consumer discretionary stocks on the hit list of short sellers are City Chic Collective (ASX:CCX), Kogan (ASX:KGN), Temple & Webster (ASX:TPW) and Redbubble (ASX:RBL), who all saw their short positions increased this month.

Redbubble reported a difficult FY22 with profits turning to loss. The e-commerce marketplace for artists reported EBITDA loss of $11.2 million, down from $52.7 million profit last year. NPAT loss was $24.6 million, compared to a profit of $31.2 million in FY21.

The Redbubble share price is down 75% year to date.

Disclosure: The author held shares in Regis Resources at the time of writing this article.