The Short Report – 23 Jun 2022

Weekly Reports | Jun 23 2022

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

Summary:

By Greg Peel

Week Ending June 16, 2022.

Last week the ASX200 fell out of bed, as the RBA's surprise 50 points rate hike spooked the market and sent the banks tumbling in particular. No counter was provided by commodities as the Shanghai reopening was undermined.

But as the table below suggests, there was no rush by shorters to take profits on the plunge. Indeed the sea of red versus limited green indicates short positions were increased.

Having crept its way up the table week by week, Block ((SQ2)) finally made it into double digits last week at 11.0% shorted, up from 9.4% the week before. Recession fears have investors abandoning BNPL on the assumption of rising bad debts. Block is down -58% from its high.

Rival Zip Co ((ZIP)), which is 7.2% shorted, is down -95%.

Going the other way last week was Betmakers Technology ((BET)), whose shorts dropped to 12.9% from 14.0%. The stock did tumble last week, but along with everything else, and any boost the stock enjoyed by signing a deal with the Norwegian tote last month has been lost.

This week PointsBet Holdings ((PBH)) shot up 18% in one session after SIG Sports took a commanding stake, but Betmakers is a bookies' service, not a bookie per se.

Last week we welcomed a newcomer to the bottom of the table in the form of Firefinch ((FFX)), which mines gold in Mali. Firefinch joins only two other gold miners shorted by 5% or more, being Bellevue Gold ((BGL)) at 5.6% and Regis Resources ((RRL)) at 9.4%.

Morgan Stanley has today downgraded Regis to Underweight, reflecting ongoing production issues.

Weekly short positions as a percentage of market cap:

10%+
FLT 16.6
BET 12.9
NAN 12.0
SQ2 11.0
PNV 10.6


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