Top 5 Most Shorted Stocks On Wall Street
Despite the S&P 500 reaching a new all-time high on Wednesday, there are still plenty of stocks that have low interest, giving short investors time to shine. The S&P 500 rose 0.7% Wednesday and beat the all-time high it set last week. The Dow Jones also added 1%, setting its own record.
Shorting a stock is a risky strategy with the potential for unlimited losses. However, participating smartly in low-interest stocks could reap benefits. Short interest refers to the total number of shares of a specific stock that have been sold short by investors but have not yet been repurchased back or closed out. To short-sell a stock simply put means to bet against a stock rising, despite not owning any shares.
Here are the top 5 stocks with the highest short interest on Wall Street that also each have Strong Sell ratings, according to recent metrics.
5th: Spirit Airlines (SAVE)
Spirit Airlines (SAVE) has been in bankruptcy talks following its failed merger with JetBlue, according to reports earlier this month. If Spirit files for bankruptcy, it is not expected to affect travelers, however, it does signal growing debt issues. With that news, SAVE shares fell, and have plummeted 26% since last Friday.
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4th: Designer Brands (DBI)
Designer Brands (DBI) is another stock that has been down considerably in the past week. After a rough second quarter that saw it dramatically miss expectations, Q3 has also missed analyst projections. DBI shares have been volatile over the past year, reacting sharply to rich or poor results. When Q3 results come in, another rough month could mean shares dropping further, to the glee of short sellers.
3rd: Nikola Corporation (NKLA)
Nikola Corporation (NKLA) shares have dropped nearly 60% in the past three months, and 19% points in the past week alone. The electric heavy-truck maker had a rough start to 2024 but rebounded towards the back end of September. Its biggest competitor is Tesla, which expects to hold its Robotaxi event in October. Thus, short interest is high for NKLA, reaching 29.07%.
2nd: SolarEdge Technologies (SEDG)
SolarEdge Technologies Incorporated (SEDG) is back up following markets closing Wednesday but is down 12% in the last five days. Shares of the photovoltaic products maker have been suffering behind the Oils-Energy sector’s recent gains. In its upcoming earnings report, the company is predicted to post an EPS of -$1.62. This indicates a 194.55% decline compared to the equivalent quarter last year. Currently, the short interest in SEDG is up to 32.91%.
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1st: Knightscope (KSCP)
Lastly, Knightscope (KSCP) stock has the most short interest among the top 5, sitting at a whopping 428.50%. Knightscope is an innovator in robotics and artificial intelligence technology focused on public safety. Recently, the company announced three new expansion contracts for its Emergency Communication Devices (“ECDs”). Counties in California, Tennessee, and Virginia are scaling up their existing contracts with Knightscope to include additional devices and long-term ECD services provided by the Company.