Key takeaways:

• A number of market darlings are currently short seller targets

Between consumer discretionary, gambling, tech, and lithium stocks, short sellers have latched onto a cohort of names that were once flying above the rest of the market. Although most of the short targets are trading significantly off their record highs, it would appear the bears are still betting on further downside to come.

Selfwealth does not offer short selling. Please note, data below is for information purposes and insights about sentiment, sourced from ASIC with a T+4 (4 trading day) delay. Individual short sellers report their short positions, so data is based on third-party input. There can be no guarantees regarding the accuracy of the data, and it should not be used as the basis for financial decisions.

Most Shorted ASX Stocks

1. Flight Centre (ASX: FLT)

Although it remains the most shorted stock across the ASX, the percentage of securities reported as sold short in Flight Centre decreased yet again over recent weeks. At the time of writing, aggregate short interest sits at 11.4% of the register, with the company recent capital raise helping to reduce that number on account of the large increase in the number of shares on issue.

2. Core Lithium (ASX: CXO)

With risk-off sentiment prevailing throughout March in response to the banking blow-up overseas, lithium stocks found themselves one of the easy' targets in shorting circles. Core Lithium was no exception, with the stock falling by a double-digit percentage. That coincided with a modest uptick in short interest, albeit the aggregate reading of 10% is a record high for the former market darling.

3. Zip (ASX: ZIP)

As interest rates continue to rise, ASIC flags regulatory action for the buy-now pay-later segment, and the company results highlight significant losses, short sellers have honed in on Zip shares. Previously a popular stock, the company share price has taken a beating, down more than 95% from its all-time high. Nonetheless, short activity continues to build. Over the last month, the level of short interest in ZIP rose 210 basis points, reaching a new high of 10% of all securities on issue.

4. Megaport (ASX: MP1)

Short interest in Megaport declined over the last month, but not enough for the stock to fight its way outside the top five most shorted stocks on the ASX. Since aggregate short activity peaked in October last year, there has been a modest improvement for the enterprise networks business. That comes despite the shock resignation of Megaport CEO, which initially prompted a surge in short interest, before news of the appointment of the company founder, Bevan Slattery, as interim CEO, soothed emotions.

5. Liontown Resources (ASX: LTR)

With sentiment towards lithium stocks waning amid concerns about the price outlook for the commodity in the face of an expected increase in supply, Liontown Resources edged higher to finish the month as the fifth most shorted stock on the local share market. Aggregate short interest in the lithium explorer rose 110 basis points to 8.9% of all securities, however, today sudden takeover offer by Albemarle could result in big changes to shorting activity this time next month.

RankCompany% Securities Reported as Sold Short

Mar, 2023

Monthly Change

1Flight Centre (ASX: FLT)

11.4%

-0.7

2Core Lithium (ASX: CXO)

10.0%

+0.3

3Zip (ASX: ZIP)

10.0%

+2.1

4Megaport (ASX: MP1)

9.2%

-0.2

5Liontown Resources (ASX: LTR)

8.9%

+1.1

6Sayona Mining (ASX: SYA)

8.6%

-2.1

7JB Hi-Fi (ASX: JBH)

7.7%

+1.2

8Brainchip (ASX: BRN)

7.4%

+0.6

9Betmakers Tech (ASX: BET)

7.3%

-4.5

10Pointsbet Holdings (ASX: PBH)

7.0%

Unchanged

*Data is T+4, based on information reported to ASIC for March 21, 2023; rounded to one decimal

Major Movers

1. City Chic (ASX: CCX)

Although short activity in City Chic spiked a month ago, those gains have effectively been wiped out - and then some - during March. Whereas the decrease in the percentage of securities reported as sold short stands at 470 basis points since this time last month, the drop is even larger if measured from the beginning of March, plunging from 7.8% to just 1.4%. It appears as though one catalyst for that move was the company earnings, which largely showcased no major surprises.

2. Betmakers Technology (ASX: BET)

Short interest in wagering technology firm Betmakers is at a 14-month low, with the aggregate level of shorts down 450 basis points across the last month. There wasn't any particular catalyst for the move, however, the trend has been heading lower since November last year. The company has long been a target of short sellers due to its rate of cash burn in a fiercely competitive market.

3. Downer EDI (ASX: DOW)

With no shortage of controversy affecting Downer EDI over the last month, the stock saw short interest surge more than three-fold since the end of February. At the time of writing, 6.4% of all securities on issue are sold short. Observers focused on margin pressure and an earnings downgrade for the contractor, as well as a host of governance issues stemming to accounting irregularities that prompted the resignation of key personnel and a negative outlook for the company credit rating.

4. Weebit Nano (ASX: WBT)

Previously, there was a negligible level of short interest in Weebit Nano, with the stock flying under the radar and doing little to attract contrarian views. However, with the stock skyrocketing to a new all-time high at the end of February, the total level of short interest in WBT has leapt from 0% to 3.9%. Some shorters have likely sought to capitalise upon the market exuberance for the stock, specifically targeting high-profile news releases concerning the commercialisation of the company resistive RAM IP.