5 Stocks with Unusually Large Short Interest

March 08, 2024 at 07:30 AM EST

Short Squeeze Stock Market Share Prices Increase Sell Make Money 3d Illustration

With the broader market reaching new all-time highs, primarily driven by the tech sector and specifically semiconductor stocks fueled by the hype surrounding AI, the spotlight is once again beginning to shine on high short-interest stocks.

These companies, facing elevated levels of short interest, have been subject to intense scrutiny and volatility as investors and short sellers engage in a tug-of-war over their stock prices. So, with investor confidence and speculation significantly on the rise, let’s delve into five of the highest-shorted stocks currently in the market and why it may be time to learn how to short stocks.

Upstart Holdings (NASDAQ: UPST)

Upstart is a lending platform in the United States that employs AI technology to make credit decisions. It offers loans for various purposes, and leverages advanced algorithms to assess creditworthiness beyond traditional factors.

The overwhelming bearish sentiment appears aligned with the market on UPST, as the stock has fallen over 35% year-to-date and almost 20% over the last month. UPST is one of the lowest-rated stocks, with a reduce rating based on nine analyst ratings. The short interest has remained severely elevated despite a significant selloff in recent months. As of February 15, 35.64% of the float was sold short, equalling almost 26 million shares positioned short. Should momentum shift to the upside, the considerable short interest might exacerbate the move.

Carvana (NYSE: CVNA)

Carvana is an online platform primarily operating in the United States that is focused on automotive retail. The company facilitates buying, selling, and financing vehicles through its website, offering customers a simplified and digital car purchasing experience.

Thanks to its elevated short interest and recent earnings, the online automotive retailer's stock has posted impressive gains recently. Year-to-date shares are up 46% and a whopping 770% over the previous year. The sentiment surrounding CVNA is also overwhelmingly bearish, with recent insider selling, a consensus rating of reduce, and a price target forecasting a 43% downside. As of February 15, the short interest in the stock was 16.51% or 33.3 million shares positioned short.

C3.ai (NYSE: AI)

C3.ai focuses on enterprise AI software solutions. Its offerings span predictive maintenance, fraud detection, and supply chain optimization and cater to various industries.

Analysts are not as bearish on the name as on the above two, with a consensus analyst rating of hold based on ten analyst ratings. However, the bearish sentiment is present, with insiders selling stock during the previous quarter, a heightened short interest, and the name featuring on the lowest-rated stocks list. As of February 15, 28.81% of the float in AI was sold short, totaling 34.5 million shares.

Arbor Realty Trust (NYSE: ABR)

Arbor Realty is a real estate investment trust headquartered in Uniondale, New York. Led by Chairman and CEO Ivan Kaufman, the company invests in diverse structured finance assets within the U.S. real estate market. Focusing on multifamily, single-family rental, and commercial real estate sectors, Arbor manages a portfolio exceeding $42 billion and originates over $16 billion in loans annually.

Unlike the above stocks, ABR has positive sentiment despite highly high short interest. The consensus analyst rating for ABR is hold, and the consensus price target is $15.67, which sees almost 22% upside for the stock. However, as of February 15, the short interest was up 8.56% over the previous month to 36.8%, making ABR one of the highest shorted stocks. As of February 15, 69.3 million shares were sold short.

ImmunityBio (NYSE: IBRX)

ImmunityBio, Inc. is a clinical-stage biotechnology company dedicated to advancing therapies and vaccines to bolster the immune system against cancer and infectious diseases. The company strives to enhance patient outcomes through innovative immunotherapy and cell therapy platforms by fostering robust and sustained immune responses.

IBRX, like ABR, is one of the highest-shorted stocks on the NYSE, with a 36.07% short float as of February 15. Over the prior month, that figure increased by 7.31%, with the total number of shares sold short now at a staggering 43.9 million. With only one analyst rating, the stock has a hold rating and a price target forecasting over 21% of downside.

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