EV Stock Fisker Remains Heavily Shorted

Short interest data is a powerful risk management tool. More often than not, heavily-shorted stocks underperform.

In this report, we are going to look at the short selling data on Fisker Inc (FSR:US). Fisker is an electric vehicle (EV) company that is based in California. Its flagship model is the ‘Ocean’, an all-electric SUV designed to go head-to-head with Tesla’s Model Y. The company is listed on the New York Stock Exchange and currently has a market cap of $2.0 billion.

High Short Interest

We last covered Fisker’s short interest in January when the company’s share price was near $7. At the time, we noted that 88.9 million shares were on loan. This represented 56.2% of the free float.

Since then, the short sellers have most likely profited, as the stock has traded as low as $4.45 this year (it is now back at $6.17).

The short sellers clearly see further profits ahead, however. We say this because at present, 101.5 million Fisker Class A shares are on loan. That equates to short interest of a very high 58.3%.

It’s worth noting that utilization (a measure of demand from short sellers) is 96.6% currently while the cost to borrow stock is 15.7%. These figures indicate that the stock is getting a lot of attention from short sellers right now.

Why Short Sellers Are Betting Against Fisker

It’s not hard to see why hedge funds are betting against this stock.

For starters, the company has missed production targets recently. In Q2, for example, the company produced 1,022 units of its Ocean SUV, well below its target of 1,400 to 1,700 vehicles. The company blamed a shortage of components for the poor performance.

Secondly, the company is losing a ton of money. Last year, Fisker made a net loss of $547 million. This year, analysts expect a net loss of $291 million.

Given the high level of short interest here, we think caution is warranted towards the stock. The data suggests that there could be a share price downside ahead.