• Short sellers think 2023 might be a turbulent trip for Flight Centre, which remains the ASX’s most shorted stock
  • Several ASX lithium stocks continue to be target of short sellers despite lithium prices ticking upwards from recent lows 
  • Short sellers continue to punt against Betmakers along with several tech and retail stocks

How does shorting work?

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.

The most shorted stocks on ASX

Swipe or scroll to reveal full table. Click headings to sort:

Code Company Short positions Shares on issue % short positions
FLT FLIGHT CENTRE TRAVEL ORDINARY 24,340,470 217,957,864 11%
CXO CORE LITHIUM ORDINARY 179,637,128 1,858,516,794 10%
LKE LAKE RESOURCES ORDINARY 126,548,668 1,422,444,707 9%
MP1 MEGAPORT LIMITED ORDINARY 13,332,961 158,423,600 8%
IEL IDP EDUCATION LTD ORDINARY 23,198,695 278,336,211 8%
AMA AMA GROUP LIMITED ORDINARY 83,718,923 1,073,070,217 8%
TPW TEMPLE & WEBSTER LTD ORDINARY 9,439,697 122,949,702 8%
BRG BREVILLE GROUP LTD ORDINARY 10,578,006 142,781,365 7%
SHV SELECT HARVESTS ORDINARY 8,865,047 121,058,664 7%
PLS PILBARA MIN LTD ORDINARY 217,799,518 2,998,013,519 7%
JBH JB HI-FI LIMITED ORDINARY 7,660,594 109,333,981 7%
APX APPEN LIMITED ORDINARY 8,583,971 124,319,061 7%
SYA SAYONA MINING LTD ORDINARY 620,345,582 9,098,753,133 7%
ZIP ZIP CO LTD.. ORDINARY 48,822,604 768,865,865 6%
ACL AU CLINICAL LABS ORDINARY 12,812,858 201,834,015 6%
BRN BRAINCHIP LTD ORDINARY 110,535,393 1,767,058,145 6%
NVX NOVONIX LIMITED ORDINARY 29,735,236 486,882,930 6%
ARB ARB CORPORATION. ORDINARY 4,896,507 81,971,722 6%
OBL OMNI BRIDGEWAY LTD ORD US PROHIBITED 16,645,294 278,852,475 6%
JRV JERVOIS GLOBAL LTD ORDINARY 122,581,808 2,079,820,066 6%
BET BETMAKERS TECH GROUP ORDINARY 54,070,473 943,541,600 6%
BOQ BANK OF QUEENSLAND. ORDINARY 36,915,518 652,485,010 6%
CCP CREDIT CORP GROUP ORDINARY 3,841,202 68,066,856 6%
DOW DOWNER EDI LIMITED ORDINARY 37,185,530 671,573,679 6%
SYR SYRAH RESOURCES ORDINARY 36,689,139 673,291,724 5%
ABB AUSSIE BROADBAND ORDINARY 12,666,525 237,682,509 5%
IMU IMUGENE LIMITED ORDINARY 340,940,887 6,423,039,111 5%
INA INGENIA GROUP FPO/UNITS STAPLED 21,262,154 407,583,264 5%
HVN HARVEY NORMAN ORDINARY 64,431,282 1,246,006,654 5%
LLC LENDLEASE GROUP FPO/UNITS STAPLED 35,247,742 689,322,065 5%
EML EML PAYMENTS LTD ORDINARY 19,054,617 373,984,129 5%
PBH POINTSBET HOLDINGS ORDINARY 15,586,662 306,857,645 5%
AWC ALUMINA LIMITED ORDINARY 145,858,901 2,901,681,417 5%
DYL DEEP YELLOW LIMITED ORDINARY 36,958,699 755,724,087 5%
PDN PALADIN ENERGY LTD ORDINARY 143,194,644 2,980,097,705 5%
BOE BOSS ENERGY LTD ORDINARY 16,861,515 352,578,862 5%
SGM SIMS LIMITED ORDINARY 9,174,699 193,176,390 5%
WEB WEBJET LIMITED ORDINARY 18,139,262 382,721,484 5%
FFX FIREFINCH LTD ORDINARY 55,552,935 1,182,846,577 5%
DMP DOMINO PIZZA ENTERPR ORDINARY 3,975,298 89,090,402 4%
BLD BORAL LIMITED. ORDINARY 48,346,644 1,103,088,419 4%
DHG DOMAIN HOLDINGS AUS ORDINARY 27,566,908 631,657,153 4%
LIC LIFESTYLE COMMUNITIES. ORDINARY 4,295,268 104,545,131 4%
MTS METCASH LIMITED ORDINARY 39,594,655 965,541,602 4%
SGR THE STAR ENT GRP ORDINARY 66,105,048 1,618,680,877 4%
CGC COSTA GROUP HOLDINGS ORDINARY 18,818,069 464,709,793 4%
INR IONEER LTD ORDINARY 84,759,378 2,098,338,267 4%
A2M THE A2 MILK COMPANY ORDINARY 29,084,764 721,976,214 4%
LTR LIONTOWN RESOURCES ORDINARY 87,292,377 2,198,454,633 4%
ADH ADAIRS LIMITED ORDINARY 6,815,368 173,050,982 4%
NIC NICKEL INDUSTRIES ORDINARY 118,874,585 3,024,257,273 4%
NEC NINE ENTERTAINMENT ORDINARY 66,889,745 1,705,393,253 4%
PNI PINNACLE INVESTMENT ORDINARY 7,751,900 201,268,091 4%
NXT NEXTDC LIMITED ORDINARY 18,814,922 495,952,875 4%
29M 29METALSLIMITED ORDINARY 18,274,541 482,052,092 4%
CUV CLINUVEL PHARMACEUT. ORDINARY 1,867,824 49,410,338 4%
CIP CENTURIA I REIT ORDINARY UNITS 23,601,753 634,930,635 4%
MSB MESOBLAST LIMITED ORDINARY 30,184,477 814,204,825 4%
BGA BEGA CHEESE LTD ORDINARY 11,246,327 304,247,980 4%
NAN NANOSONICS LIMITED ORDINARY 11,046,035 302,174,713 4%
SUL SUPER RET REP LTD ORDINARY 8,102,615 225,826,500 4%
BBN BABY BUNTING GRP LTD ORDINARY 4,814,696 134,906,489 4%
CXL CALIX LIMITED ORDINARY 6,373,848 181,086,220 4%
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Flight Centre still hitting turbulence with short sellers

Flight Centre (ASX:FLT) remains the most shorted stock on ASX. However, its short position has not gone up from May, remaining at 11%.

Short sellers still think 2023 might be a turbulent trip for FLT,  despite rising more than 45% YTD after the travel sector continues its recovery from the Covid-19 pandemic.

At the start of 2023 FLT undertook a successful $240 million cap raise to buy Scott Dunn, a leading UK-based luxury travel brand specialising in tailor-made luxury holidays, for an enterprise value of £121 million ($211 million).

Despite headwinds of higher inflation and interest rate rises, FLT at a conference in May said the travel sector continues to be “holding up strongly”.

The company said it is targeting $270m-$290 million underlying EBITDA – previously $250m-$280m excluding Scott Dunn – for FY23.

FLT’s corporate travel sector is also outperforming with total transaction value (TTV) for 10 months to April 30, 2023 already in line with record FY19 full year results.

FLT said strong pipeline of future TTV as new and recent wins are onboarded and start to trade.

 

The FLT share price today:

 

 

Lithium stocks heavily shorted

Sayona Mining (ASX:SYA), Core Lithium (ASX:CXO), Liontown Resources (LTR)and Lake Resources (ASX:LKE)  remain a target of short sellers, continuing to target ASX lithium stocks.

The shorting of lithium stocks comes despite, as Stockhead’s Cameron Drummond reported on Friday, lithium prices in China ticking up again for the week ending June 9. 

Carbonate prices rallied up to 305,000 yuan a tonne recently, up from lows of 167,800 yuan a tonne in late April.

While the surge in prices has slightly faded, pricing across the board remain still in the green, with lithium carbonate prices up another 5.5%, while lithium hydroxide was also up 4.4%.

 

The SYA, CXO LTR, LKE share price today:

 

Short sellers punt against Betmakers

Short sellers are punting against Betmakers Technology Group (ASX:BET) which has seen its short position over the month climb from 7% to 13% to become the second most shorted stock on the ASX.

BET operates a platform model providing the back-end technology for bookmakers, primarily in horse racing.

The increase in the short position comes despite in late May BET providing an update on a strategic operational restructure as it aims to accelerate its path to profitability.

Normalisation of annualised staff and operating overheads of the business are expected to reduce from $91.5m (H1 FY23) to ~$70m (unaudited) from Q1 FY24, representing a decrease of 23%.

BET said the reduction in cost is primarily driven by restructuring of global operations and technology.

“BetMakers is committed to providing long-term value to shareholders and this restructuring is an essential step towards achieving that goal,” CEO Jake Henson said.

“The changes made aim to provide the business with a clear path to profitability while also providing a more streamlined operating structure to maximise future growth opportunities.”

Another ASX betting name Pointsbet (ASX:PBH) has seen its short position marginally drop from 8% to 7% recently with the company announcing in May it plans to sell its PointsBet US business to Fanatics Betting for US$150 million (~A$222 million).

The proposed deal follows a detailed review of a range of strategic options for the North American business. Shareholders will vote on the deal at an EGM on June 30.

PBH said eight of the largest 10 holders, representing 44.58% of the company’s issued capital, have either voted in favour, or have advised  that, in the absence of a superior proposal, they support and intend to vote in favour of the sale.

 

The BET & PBH share price today:

 

Tech and retail names on short-sellers hit list

The S&P ASX 200 Information Technology was the best performing sector in May, up 11.6% and rising 16.94% YTD on the back of a surge in big names overseas tech names and investor interest in artificial intelligence.

However, short sellers are continuing to target ASX tech stocks, including Megaport (ASX:MP1), Novonix (ASX:NVX), Appen (ASX:APX)  and  BrainChip Holdings (ASX:BRN). 

Brisbane-based NVX shares rallied ~6% last week after the company announced it had inked a deal with one of the biggest manufacturers of electric car batteries in the world, South Korea’s LG Energy Solution (LGES).

MP1 announced at the end of April that it now expects Normalised EBITDA to be materially above market consensus of $9 million in FY23 and $30 million in FY24 following moves to improve the company’s operating and financial performance and cash generation.

MP1 expects to report normalised EBITDA in FY23 in the range of $16 million to $18 million, and normalised EBITDA in FY24 in the range of $41 million to $46 million.

The MP1, NVX, APX & BRN share price today:

 

Short sellers target retail weakness

Also on the list is BNPL play Zip Co (ASX:ZIP) and several consumer discretionary stocks which could take the toll of higher interest rate rises and cost of living including JB HiFi (ASX:JBH),Baby Bunting (ASX:BBN), City Chic Collective (ASX:CCX), Temple & Webster (ASX:TPW), Adairs (ASX:ADH)and Harvey Norman Holdings (ASX:HVN). 

Home furnishing company ADH said recently after a solid sales performance in 1H FY23, the impact of rising interest rates and higher cost of living has created a more subdued trading environment since April with lower traffic observed both in stores and online.

 

The ZIP, JBH, BBN, CCX, TPW, ADH & HVN Share price today:

 

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