Short Report: Bears pound on EV and solar names after election

Welcome to this week’s installment of “The Short Interest Report” – The Fly’s weekly recap of short interest trends among some of the most widely followed high-short-float stocks. Using the data from our partner Ortex.com, which utilizes the latest information from stock lenders to estimate short interest changes for thousands of publicly traded companies, this report will screen for some of biggest changes in short interest as a percentage of free float and days-to-cover ratios while also considering the short interest data on some of the more volatile and heavier-traded names of the week. Based on the availability of data from Ortex, the report tracks the trading period that covers prior Friday through Thursday of this week, excluding holidays. As a basis of comparison for stocks discussed below, the S&P 500 index was up 4.7%, the Nasdaq Composite was up 6.5%, the Russell 2000 index was up 8.4%, the Russell 2000 Growth ETF (IWO) was up 9.5%, and the Russell 2000 Value ETF (IWN) up 7.5% in the five-day trading session range through November 7.

SHORT INTEREST GAINERS

• Ortex-reported short interest on Lucid Group (LCID) spiked from 19.6% to 65.2%, the biggest short exposure on record, with days to cover on the name also rising from 10.9 to a three-week high of 11.9 despite a notable increase in trading volume following U.S. elections. Lucid has had a difficult 2024, losing nearly 50% of its value year-to-date, and the pressure on the stock was magnified by a mid-October equity raise, though political risk for the industry was realized in Tuesday’s results as shares fell to their lowest level of the year on Wednesday. In the five-day period covered, Lucid was flat.
• Post-election fluctuation was also felt in other pockets of the EV sector. In charging, estimated short interest for EVgo (EVGO) also jumped substantially as the stock sank. Shorts as a percentage of free float rose from 28.4% to 31.5%, the highest level in three months, while days to cover rose from 4.0 to 5.1 – a one-month high. EVgo shares had recently been buoyed by multiple sell-side upgrades in early October as the company was granted a DOE loan guarantee to support the buildout of public EV charging infrastructure, though investors are turning cautious that the incoming administration will be less inclined to support the auto industry electrification. EVgo shares ended Thursday down 22% in the five-day period covered and off by 32% from its late-October highs, though the stock is still up 55% year-to-date.
• The Solar industry is also feeling the impact of this week’s U.S. election outcome in regards to expected policy initiatives to undo the green energy priorities of Biden’s Inflation Reduction Act, and investors are reacting accordingly. Ortex-reported short interest in SolarEdge Technologies (SEDG) was up from 30.5% to 32.4% – nearly-matching a one-month high – while that of Sunnova Energy (NOVA) increased from 27.8% to 29.2%, with very high levels of trading volume in both names Wednesday-Friday. The stocks of both names are also under severe pressure – SolarEdge was down 13% in the five-day period covered and has now lost 85% year-to-date, while Sunnova is off by 40% through Thursday, also losing 79% year-to-date while making fresh 52-week lows by Friday.
• Estimated short interest in Canada Goose (GOOS) had slipped to match its 2024 lows around 21% just two weeks ago as bears turned more skittish on sustaining exposure following an 18% slide in the stock from late September highs. Bears boosted their bets for the past two weeks however, with short positioning as a percentage of free float rising two percentage points to 24% this week. Caution was rewarded as the company reported a top and bottom-line decline for Q2 this week and also slashed its FY25 growth projections to down low-single-digits to up in low-single digits from previous forecast of an increase in low-single-digits. Canada Goose ended the week down 1%, though the stock is now off by 18% year-to-date.

SHORT INTEREST DECLINERS

• Ortex-reported short interest on value-oriented insurance provider Lemonade (LMND) is sharply lower in the wake of the company’s earnings, with bears rushing for the exits after its blowout Q3 results and guidance raise last week. Short positioning as a percentage of free float on Lemonade was cut from 29% to 25% this week – the fourth consecutive decline from the peak seen on October 10. Meanwhile, the stock has now risen by over 80% from an October 8 trough. Lemonade shares are also up 51% from pre-earnings levels last week and up 76% year-to-date.