Ford stock has been on a bit of a roller coaster ride over the past couple of years, which is to be expected given the global pandemic and ensuing complications it caused for the industry as a whole. Throw in Ford’s massive investments in electrification amid various macroeconomic uncertainties, and there is certainly plenty of volatility here. However, analysts have largely either maintained or raised ratings on Ford stock recently, showing confidence in the company’s long-term plan. That isn’t the case with Swiss multinational investment bank and financial services company UBS, however, which just downgraded its outlook on Ford stock, as Ford Authority reported yesterday. Now, according to Hazeltree’s 2023 Year in Review Report, Ford stock was also among the most shorted securities last year, too.
Shorting a stock occurs that a trader borrows shares from a broker and immediately sells them with the expectation that the share price will fall shortly after. This annual report lists the top five securities that were the most shorted by hedge funds in the Americas, EMEA, and APAC regions in the large-, mid-, and small-cap ranges, and in that regard, Tesla, Ford, and Wayfair topped the Americas large-cap list for most shorted stocks, while in EMEA, Siemens Healthineers, Fastighets AB, and Alstom were among the top five most shorted. In APAC, Commonwealth Bank of Australia closed out the year as the most shorted stock in the large-cap category.
“High inflation and interest rates could be behind short sellers’ focus on consumer cyclical stocks,” said Tim Smith, managing director, data insights at Hazeltree. “It was no surprise to see Tesla top the list of most shorted stocks in 2023 after seeing it lead the pack in our monthly Shortside Reports.”
Ford recently announced that it was pushing back a planned $12 billion dollar investment in electrification and is also canceling plans to build a joint-venture battery plant in Turkey as demand for EVs tapered off near the end of 2023, even as sales set a new record for the year. Regardless, the long-term outlook for EVs remains positive, with most expecting demand to continue to grow for the foreseeable future – just perhaps not as quickly as originally thought, which likely helped drive this skepticism.