In this article, we discuss 10 most shorted stocks in the world. If you want to see more stocks on this list, click 5 Most Shorted Stocks in the World.
Short squeezes have rapidly gained popularity in the last two years, when retail investors on Reddit gathered to initiate bullish positions in stocks that were heavily shorted by elite hedge funds, such as GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings, Inc. (NYSE:AMC). These stocks gained unfounded highs due to extraordinary retail interest, and resulted in losses worth billions of dollars for well-known Wall Street hedge funds, including Melvin Capital Management, Point72 Asset Management, and D1 Capital Partners.
However, the currently volatile stock market has seen declining short interest as investors are quickly cashing out their long positions. According to a Bloomberg report dated September 20, short positions have declined by $12 billion in Q3 2022 for the Russell 3000 as investors made losses amounting to $59 billion, which is a 6% drop on an average short position of $986 billion. This data was collected through mid-September by Ihor Dusaniwsky, head of predictive analytics at S3 Partners.
The turbulent stock market of 2022 has caused a bloodbath for bulls and bears alike, despite the S&P 500 sinking 20% YTD. Two weeks prior, short sellers had to face a brutal four-day rally of 5% that led many investors to cover bets which turned out okay. Dusaniwsky reiterated that short sellers have been trimming their exposure amid extreme market volatility also due to hawkish moves of the Federal Reserve. April LaRusse, head of investment specialists at Insight Investments, noted that short interest is also falling given that too much of the bad news has already been priced into equities. This leads many short sellers to not be as steadfast in their positions.
Despite the rise and fall in short interest, we have compiled a list of the most shorted stocks in the world, the most popular of which include Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG).
Photo by Alexandr Bormotin on Unsplash
Our Methodology
We selected the most shorted stocks in the world based on the number of shares shorted as of August 30. We picked companies where more than 30 million shares had been shorted. The business fundamentals and the analyst sentiment around the stocks have also been discussed. The stocks have been ranked according to the number of hedge fund holders as of Q2 2022, which was assessed from Insider Monkey’s database of 895 elite hedge funds.
Most Shorted Stocks in the World
10. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 17
Shares Shorted as of August 30: 49.59 million
GameStop Corp. (NYSE:GME) is a Texas-based games and entertainment products company that operates through its e-commerce properties and stores in the United States, Canada, Australia, and Europe. On September 7, GameStop Corp. (NYSE:GME) reported that revenue fell 4.0% in Q2 2022 to $1.14 billion. The operating loss for the quarter was $108 million, versus $58 million a year ago. As of August 30, the shorted shares of GameStop Corp. (NYSE:GME) stood at roughly 50 million. GameStop was one of the most famously shorted stocks of 2021, and the short interest has continued into 2022 as well.
On July 22, Wedbush analyst Michael Pachter lowered the price target on GameStop Corp. (NYSE:GME) to $7.50 from $30 and maintained an Underperform rating on the shares. The analyst told investors that GameStop Corp. (NYSE:GME) stock remains at levels that seem disconnected from the business fundamentals, and the company’s turnaround plan has so far been ineffective. The analyst was also skeptical about GameStop Corp. (NYSE:GME)’s capacity for sustained success of its new NFT marketplace.
According to Insider Monkey’s data, 17 hedge funds were bullish on GameStop Corp. (NYSE:GME) at the end of the second quarter of 2022, with collective stakes worth $64.5 million, down from 18 funds in the prior quarter worth $265.6 million. Kenneth Mario Garschina’s Mason Capital Management held a notable position in the company, with 518,445 shares worth over $19 million.
In addition to Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), GameStop Corp. (NYSE:GME) is one of the most shorted stocks in the world.
Here is what Bireme Capital specifically said about GameStop Corp. (NYSE:GME) in its Q2 2022 investor letter:
“Amazingly, GameStop Corp. (NYSE:GME) is one of our only short positions to not fall in 2022. The stock trades at an $11.5b market cap, exceeding its pre-pandemic peak by billions of dollars. This is despite the fact that revenue is down 30% from the peak, gross margins are down 1500 bps, and the company has generated a negative free cash outflow of $700m in the last four quarters (we had to double check that number because it is so high).
Wall Street has consistently revised downward their estimates of Gamestop’s profitability, making its stock price stability in 2022 even more perplexing. Analysts currently estimate an EBITDA loss of around $400m, markedly worse than their estimates as of 2/3/22 of a loss of $60m. Their recently launched NFT marketplace will do nothing to fix their core business and comes about a year too late to be relevant in the NFT space. Instead, we see this as another example of a meme stock company hoping it can ape its way into a new business model, utilizing the popularity of the stock to drive new lines of business. We are not optimistic, and think the $11.5b market cap drastically overestimates the capability of Gamestop to pivot into something more profitable. We find it unlikely that Gamestop books a GAAP profit ever again.”
9. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 18
Shares Shorted as of August 30: 102.88 million
AMC Entertainment Holdings, Inc. (NYSE:AMC) is a Kansas-based company that owns and operates theaters in the United States and Europe. AMC Entertainment Holdings, Inc. (NYSE:AMC) is one of the most shorted stocks in the world, with the number of shares shorted as of August 30 amounting to 102.88 million. On August 4, the company reported a Q2 GAAP loss per share of $0.24 and a revenue of $1.17 billion, falling short of market consensus by $0.01 and $17.66 million, respectively.
On August 23, Wedbush analyst Michael Pachter lowered the price target on AMC Entertainment Holdings, Inc. (NYSE:AMC) to $2 from $4 and reaffirmed an Underperform rating on the shares. The analyst noted that while theatrical exhibition is on its way to normalization, the volume of content has not yet reached the pre-pandemic levels and there have been several production delays. However, AMC Entertainment Holdings, Inc. (NYSE:AMC) has a lot of cash to ride out a two-month slump, and it is well-positioned for a strong Q4 and 2023, the analyst contended.
Among the hedge funds tracked by Insider Monkey, 18 funds reported owning stakes in AMC Entertainment Holdings, Inc. (NYSE:AMC) at the end of Q2 2022, compared to 16 funds in the last quarter. Israel Englander’s Millennium Management is a prominent position holder in the company, with 2.8 million shares worth $38.2 million.
8. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 54
Shares Shorted as of August 30: 103.8 million
3M Company (NYSE:MMM) is an American multinational diversified technology company. It operates through four segments – Safety and Industrial, Transportation and Electronics Health Care, and Consumer. The stock has plunged over 36% YTD as of September 23, compared to a 23% drop for the S&P 500 index. 3M Company (NYSE:MMM) is one of the most shorted stocks in the world. The float shorted came in at 18.25%, or 108.8 million shares.
On August 9, UBS analyst Chris Snyder upgraded 3M Company (NYSE:MMM) to Neutral from Sell with a price target of $126, up from $118. The valuation now completely factors in 3M Company (NYSE:MMM)’s litigation liability and broader overhang, the analyst told investors. He added that the company’s cloud of litigation has concealed the “high-quality nature” of its business and brands, which generate some of the top margins in his coverage.
According to Insider Monkey’s data, 54 hedge funds were bullish on 3M Company (NYSE:MMM) at the end of June 2022, up from 51 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with roughly 6.2 million shares worth close to $802 million.
Here is what Mayar Capital has to say about 3M Company (NYSE:MMM) in its Q2 2022 investor letter:
“We also bought back into 3M (NYSE:MMM) as the stock reached attractive levels. We’d sold our shares in 3M last year when the price exceeded our estimated fair value, and as better opportunities to invest in presented themselves at the time. Nonetheless, we’ve always liked this business with its diversified revenues, its R&D leadership and its stable margins.
7. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 66
Shares Shorted as of August 30: 69.11 million
Occidental Petroleum Corporation (NYSE:OXY) is an American company that engages in the acquisition and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. Occidental Petroleum Corporation (NYSE:OXY) is a significant feature on our list, since as of August 30, over 69 million Occidental Petroleum Corporation (NYSE:OXY) shares had been shorted, up from 61.5 million in the last month.
On September 12, Citi analyst Scott Gruber downgraded Occidental Petroleum Corporation (NYSE:OXY) to Neutral from Buy with a price target of $67, up from $65. The stock, which is the best performing exploration and production company year-to-date, now trades at a 2023 cash flow multiple approaching EOG Resources, Inc. (NYSE:EOG) and further upside potential “appears modest,” the analyst told investors in a research note.
According to the second quarter database of Insider Monkey, 66 hedge funds held stakes worth $13.75 billion in Occidental Petroleum Corporation (NYSE:OXY), compared to 67 funds in the prior quarter worth $12.6 billion. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, owning roughly 20% of Occidental Petroleum Corporation (NYSE:OXY)’s total shares.
Here’s how Smead Capital Management mentioned Occidental Petroleum Corporation (NYSE:OXY) in its Q2 2022 investor letter:
“For the quarter, our best-performing stocks were Continental Resources (CLR), Merck (MRK) and Occidental Petroleum Corporation (NYSE:OXY). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list.
If you are wondering how we are outperforming the S&P 500 Index in the first half of the year, look no further than our top three performers. Occidental Petroleum (OXY), Continental Resources (CLR) and ConocoPhillips (COP) soared in value and were barely represented in the S&P 500 Index. To quote Jerry Jones, owner of the Dallas Cowboys, “We are in the first quarter on higher energy prices!””
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Shares Shorted as of August 30: 60.77 million
Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) is one of the most shorted stocks in the world. Michael Burry, the renowned investor of The Big Short fame and founder of Scion Asset Management, sold his Tesla, Inc. (NASDAQ:TSLA) stake in Q3 2021. He recently said that if he still owned the stock, he would short it. Burry has previously placed short bets on Tesla, Inc. (NASDAQ:TSLA), amounting to more than half a billion dollars. He weighed in on Tesla once again after one of the company’s megapack batteries was involved in a fire that caused a blockade on a California highway for a few hours.
On September 20, Morgan Stanley analyst Adam Jonas said Tesla, Inc. (NASDAQ:TSLA) is facing its greatest ever competition in China from domestic Chinese EV companies. However, he believes that Tesla, Inc. (NASDAQ:TSLA) will be done with its “peak China” dependency stage over the next 12 months as capacity growth in the US and Europe supply chains will be combined with far higher levels of vertical integration. He maintained an Overweight rating and a $383 price target on Tesla, Inc. (NASDAQ:TSLA) shares.
According to Insider Monkey’s data, 72 hedge funds were long Tesla, Inc. (NASDAQ:TSLA) at the end of Q2 2022, compared to 80 funds in the last quarter. Cathie Wood’s ARK Investment Management is a prominent Tesla stakeholder, with 1.4 million shares worth over $1 billion.
Like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), short sellers are targeting Tesla, Inc. (NASDAQ:TSLA).
Here is what Grantham Mayo Van Otterloo & Co. LLC had to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“To put the demand growth for clean energy materials into perspective, let’s look at Tesla, Inc. (NASDAQ:TSLA). At its Battery Day last year, Tesla, Inc. (NASDAQ:TSLA) projected three terawatt hours of lithium-ion battery capacity needed in 2030 for the EVs and storage they expect to produce. To reach this target, Tesla alone would gobble up approximately 75% of the world’s current nickel production and four times the world’s current lithium production. These numbers are astounding enough, but when one considers that EVs currently represent just 15% of global nickel demand and about 45% of lithium demand and that Tesla will likely be producing only a small proportion of the world’s EVs in 2030, the implications are staggering. Clean energy materials companies will make a lot more money in the decades to come than they ever have both because they will be selling a lot more metric tons of material and because there are certain to be shortages where supply can’t keep up with the rapidly growing demand.”
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Disclosure: None. 10 Most Shorted Stocks in the World is originally published on Insider Monkey.
