The Short Report – 05 Aug 2021

Weekly Reports | Aug 05 2021

See Guide further below (for readers with full access).

Summary:

By Greg Peel

Week Ending July 29, 2021.

Last week saw the ASX200 begin a choppy, delta-uncertain run up towards this week’s new record high.

Record highs for the index are not the ambrosia of short-side traders, but not every stock within is in rally mode.

Zip Co ((Z1P)) had been heading south on increasing BNPL competition, and rival Afterpay ((APT)) likewise, when US-based Square this week made its offer for Afterpay, sending Zip shares up sharply in sympathy.

But before that announcement, Zip shorts fell only to 11.3% last week from 11.7%. Profit-taking in Webjet ((WEB)), following its delta-driven slide, took its shorts to 10.7% from 11.9%, leaving Zip at the top of the table.

There remains a cluster of stocks in the 10%-plus shorted range – Zip, Webjet, Webjet peer Flight Centre ((FLT)), and surprisingly, covid-winner Kogan ((KGN)), which is yet to sort out excess inventory and cost issues.

Then it’s daylight, and not much thereafter. To only have two stocks in the 5% bracket, and none entering last week, is very unusual.

But as I said, that’s what record index highs can do.

Weekly short positions as a percentage of market cap:

10%+
Z1P     11.3
WEB   10.7
FLT     10.1
KGN   10.0


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