2024-01-03 06:07:43 ET
American stocks had a great performance in 2023 as the Nasdaq 100 index jumped by more than 55%. The blue-chip S&P 500 index rose by over 22%, making it one of its best years in a long time. Still, most companies in the EV and clean energy industry did not do well. Here are some of the most shorted US stocks, which could see some short squeezes in 2024.
Fisker
Fisker (NYSE: FSR) is one of the most shorted US stocks as concerns about the EV industry remains. The company has a short interest of over 45%. These short-sellers have done well since the stock has dropped by over 77% in the past 12 months.
Fisker stock has collapsed as the company has downgraded its delivery estimates two times. It attributed this downgrade to the logistics challenges shipping vehicles from Austria to the United States.
There are concerns about the EV industry now that it is getting saturated while demand seems to be fizzling. Still, Fisker has received good reviews for its Ocean brand and it is also seeing robust demand.
Another benefit is that Fisker does not manufacture its vehicles. Instead, it has partnered with Magna, making it an asset-light business. As such, I believe that the Fisker stock could go through a short squeeze if it provides a positive business outlook.
Upstart
Upstart (NASDAQ: UPST) is another highly shorted US stock with a short interest of 42.5%. Unlike Fisker, these short-sellers are not doing well as the stock is up by over 200% in the past 12 months.
This rebound happened as the company reported relatively strong results in a difficult environment. In its third quarter, the company said that its operating expenses fell by 17% as the company reduced its engineering expenses. Its net revenue dropped by 14% to $135 million.
Upstart is facing substantial challenges such as low loan growth and high losses. It is unclear when it will become profitable. The management expects its Q4 revenue will be $135 million while its net interest income will be minus $15 million.
Beyond Meat
Beyond Meat (NASDAQ: BYND) stock is also highly shorted in Wall Street. It has a short interest of 42.2% while the stock has crashed by over 33% in the past 12 months. It crashed by 87% since going public.
Beyond Meat is going through serious issues as demand for its products wanes. Unfortunately, the plant-based meat industry that was expected to see strong growth is decelerating.
The company’s revenue dropped by 9% in the last quarter to $75.3 million. It blamed the decline to higher discounting and low volumes, a sign that its demand is struggling. In the US, retail sales dropped by 34% to $30.5 million while the foodservice revenue fell by 21%.
Beyond Meat’s future is highly uncertain unless it comes up with another popular product. It could come under strain because of its huge debt burden of over $1.1 billion. It has $232 million in cash and is still burning it.
Lemonade
Lemonade (NYSE: LMND) is another company that is highly shorted as concerns about its technology continue. While the stock is up by 24% in the past 12 months, it has dropped by almost 80% since going public.
Lemonade’s business is doing quite well. Its customer count jumped to more than 2 million while its gross earned premium rose by 27%. It also narrowed its net loss to $62 million from $91 million in the same quarter in 2022.
Lemonade’s balance sheet is quite strong. It has over $945 million in cash against a market cap of over $1.19 billion. This means that the Lemonade stock has some more upside in the coming months.
C3.ai
C3.ai (NYSE: AI) is also highly shorted as concerns about its valuation jumped. The stock has risen by more than 159% in the past 12 months. It has a short interest of over 40%. The concern is that the company will not benefit substantially from the AI hype.
This view was confirmed by the recent financial results. Its revenue came in at $17.3 million, missing analysts’ forecasts by $1.1 million. It also made an operating loss of $25 million while its free cash flow was negative $55.1 million.
The other heavily shorted stocks in Wall Street are ReShape Lifesciences (RSLS), B.Riley Financial (RILY), Trupanion (TRUP), Faraday Future (FFIE), and Carvana.
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