Short Selling

Short interest at EV maker Fisker remains extremely high

Fisker Inc
(FSR:US)
12 months:
-49.33%
Activity:
Bearish
Pattern:
High short interest
News:
Q2 results
Fisker Inc
(FSR:US)
12 months:
-49.33%
Activity:
Bearish
Pattern:
High short interest
News:
Q2 results
The image's background depicts a white car, with the blog introduction mentioning the 89.3M shares are on loan on top.

Short interest data shouldn’t be ignored. Rich with institutional sentiment, this data can provide valuable insights into a company’s investment potential.

In this report, we are going to look at the short interest data on Fisker Inc (FSR:US). Fisker is an American 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 capitalization of $2.24 billion.

Fisker short interest

Our data shows that at present, short interest at Fisker is very high. Currently, around 89.39 million FSR shares are on loan. That represents approximately 61% of the free float. This tells us that institutions are aggressively targeting the stock.

Aside from the high level of short interest, there are a few red flags in the data. One is that utilization is 100%. Utilization is a measure of demand on the short side. A reading of 100% tells us that demand for the stock from short sellers is intense. Another red flag is the cost to borrow of 19.56%. This also indicates that demand for the stock from short sellers is extremely high.

It’s worth noting that the short sellers have had success with Fisker in the recent past. Back in April, we highlighted the fact that short interest was high at around 50%. Since then, Fisker’s share price has declined by over 30%, meaning that the short sellers have generated strong profits.

Why are short sellers targeting Fisker?

As for why the short sellers are targeting Fisker, it could be down to industry-wide operational issues. Recently, the entire EV industry has experienced challenges relating to supply chains, logistics, and high input costs. With the company yet to commence production, there are questions as to whether it will be able to hit its production targets.

It could also be down to the company’s lack of profitability. In Q2, Fisker generated a net loss of $106 million. For the full year, analysts expect the group to post a net loss of $491 million.

Alternatively, it could be down to the rising cost of capital. Fisker may need to raise money in the years ahead due to its lack of profitability. This is now going to be quite expensive.

Finally, short sellers could simply be looking at the stock’s valuation. A $2.1 billion valuation for a company that is yet to deliver a vehicle could be considered high.

Whatever it is the short sellers are looking at here, we think caution is warranted towards the stock. The high level of short interest indicates that short sellers expect the stock to continue falling.

Recent Articles