The Short Report – 08 Dec 2022

Weekly Reports | Dec 08 2022

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

Summary:

By Greg Peel

Week Ending December 1, 2022.

Last week brought a surprise drop in Australia’s CPI and confirmation from Jerome Powell the Fed will now ease the pace of rate hikes, sending the ASX200 soaring to its highest level since May.

It’s been all downhill since.

In the week before last short activity was minimal. Last week all hell broke loose.

There was a lot of action at the bottom of the table, as has been the case lately, but last week suddenly the top of table got in on the action as well.

Last week Betmakers Technology ((BET)) shares fell -15% and profit-taking took shorts down to 13.3% from 14.7%, moving Flight Centre ((FLT)) back into its longstanding top of the table position. Betmakers then rallied 20% to a peak on Monday, but has come off again since.

Moves to regulate the BNPL sector have weighed on Block ((SQ2)), shorts in which fell to 11.3% from 12.5% last week.

A capital raise from Domino’s Pizza ((DMP)) had shorters snapping up discounted stock. Shorts fell to 7.7% from 11.4%.

Perpetual ((PPT)) moved up to 11.2% shorted from 9.4%, with the company currently involved in a messy two-way takeover play.

Shares in perennially troubled gold miner St Barbara ((SBM)) fell modestly last week but the stock has dropped out of the 5%-plus shorted table from 8.3%. I’ll reserve judgement on that one, in case it’s an ASIC data blip.

In a tale of two discretionary retailers, Temple & Webster ((TPW)) posted a positive trading update last week which sent that stock higher and shorts down to 6.9% from 8.1% on short-covering, while City Chic Collective ((CCX)) posted a rather negative trading update and lost half its value. Profit-taking saw shorts fall to below 5% from 6.1%.

Weekly short positions as a percentage of market cap:

10%+

FLT     14.3
BET     13.3
SQ2     11.3
PPT     11.2
MP1    10.6


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