In this article, we discuss the 5 most shorted stocks to watch in June. If you want to read our analysis of these stocks, go directly to the 10 Most Shorted Stocks to Watch in June.
5. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 25
Float Shorted: 31.78%
Stock Price as of June 14: $33.61
Upstart Holdings, Inc. (NASDAQ:UPST) is a San Mateo, California-based AI lending platform that uses non-conventional variables like education, employment status, and marital status to anticipate the creditworthiness of clients and connects with banks and credit unions to give out loans.
On May 20, David Chiaverini at Wedbush gave Upstart Holdings, Inc. (NASDAQ:UPST) an Underperform rating and lowered the price target from $20 to $15. The analyst revealed that Upstart and the Consumer Financial Protection Bureau had mutually terminated the no-action letter, which had provided immunity to Upstart Holdings, Inc. (NASDAQ:UPST) from being charged with fair lending law violations in connection with its proprietary algorithm. This development could result in lower loan originations.
Here’s what Vulcan Value Partners said about Upstart Holdings, Inc. (NASDAQ:UPST) in its Q1 2022 investor letter:
“Upstart Holdings Inc. is an artificial intelligence (AI) and cloud-based lending platform. Upstart’s stock price has been very volatile, but its value has grown steadily. Last year, the company grew its revenue by over 250% organically, which materially exceeded our expectations. In addition, the company continues to generate robust free cash flow and is launching new products to expand its business. Upstart’s value has increased consistently since we first purchased it. Following our discipline, we have added to our position when its stock price has declined and its price to value ratio has improved, and we have reduced our stake when its stock price has risen faster than its value.”
As of Q1 2022, Upstart Holdings, Inc. (NASDAQ:UPST) was held by 25 hedge funds.
4. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 21
Float Shorted: 40.43%
Stock Price as of June 14: $152.15
MicroStrategy Incorporated (NASDAQ:MSTR) is a Tysons, Virginia-based provider of business intelligence, cloud-based services, and mobile software.
The stock has been heavily shorted because MicroStrategy Incorporated (NASDAQ:MSTR) could be forced to stake more tokens against its bitcoin-backed loan or risk a margin call on the loan due to a significant dip in Bitcoin price. If the price of bitcoin falls below the $21,000 level, MicroStrategy Incorporated (NASDAQ:MSTR) would have to inject more capital or liquidate the collateral of the loan, which is 19,466 bitcoins. MicroStrategy Incorporated (NASDAQ:MSTR) had obtained the loan from San Diego, California-based crypto bank Silvergate Capital. In the past six weeks, Bitcoin has lost 40% of its value, while MicroStrategy Incorporated (NASDAQ:MSTR) has declined by 25%.
MicroStrategy Incorporated (NASDAQ:MSTR) was discussed in the Q1 2021 investor letter of Alger. Here’s what the firm said:
“MicroStrategy Incorporated was among the top contributors to performance. MicroStrategy is a global leader in enterprise analytics software and services. MicroStrategy’s core software platform provides customers with visualization and reporting capabilities, mobility features, and custom applications to help with complex business questions. Today, MicroStrategy has over 4,000 customers worldwide. In August 2020, MicroStrategy decided to make bitcoin its preferred reserve currency. To date, MicroStrategy has purchased over 90,000 bitcoins at an aggregate purchase price of $2.17 bi11 ion and an average price of over $23,985 per bitcoin. Going forward, MicroStrategy plans to use excess cash generated by its core business to purchase additional bitcoin.
Shares of MicroStrategy outperformed in the first quarter due to the appreciation of the company’s bitcoin asset, as the price of bitcoin relative to the U.S. dollar rose materially in the quarter. This bitcoin appreciation was driven by concerns about U.S. dollar inflation as well as other public companies deciding to acquire bitcoin to diversify reserve assets. MicroStrategy is establishing itself as a thought leader in the bitcoin space, and the company hosted an event at its February user conference to help other organizations understand the benefits of bitcoin as a reserve asset. MicroStrategy’s core software business is also benefitting from its status as a leader in the bitcoin space, with the increased public attention aiding MicroStrategy’s recruitment and marketing efforts as the software business continue to transition to a cloud-based subscription model.”
MicroStrategy Incorporated (NASDAQ:MSTR) was held by 21 hedge funds as of Q1 2022.
3. Nikola Corporation (NASDAQ:NKLA)
Number of Hedge Fund Holders: 16
Float Shorted: 28.96%
Stock Price as of June 14: $5.23
Nikola Corporation (NASDAQ:NKLA) is a Salt Lake City, Utah-based manufacturer of heavy-duty commercial battery EVs, fuel-cell EVs, and other energy solutions.
On June 9, the company revealed that its Nikola Tre battery EV had been approved by the New York Truck Voucher Incentive Program. The buyers of Nikola Tre BEV will now become eligible for incentives of up to $185,000 for every truck. The incentive is provided to encourage the adoption of heavy-duty EVs for commercial purposes. Nikola Corporation (NASDAQ:NKLA) is also registered in California in a similar program aimed at achieving zero-emission. Despite the positive developments, the stock is still being considered a speculative stock by investors. The company has recently started earning revenue from operations while its costs remain high. On June 13, Chris McNally at Evercore ISI lowered the price target on Nikola Corporation (NASDAQ:NKLA) from $14 to $10.
Nikola Corporation (NASDAQ:NKLA) was held by 16 hedge funds at the end of Q1 2022.
2. Camping World Holdings, Inc. (NYSE:CWH)
Number of Hedge Fund Holders: 16
Float Shorted: 39.84%
Stock Price as of June 14: $25.57
Camping World Holdings, Inc. (NYSE:CWH) is a Lincolnshire, Illinois-based company that specializes in selling recreational vehicles (RVs) and their parts. Furthermore, the company is involved in selling camping supplies.
On May 5, Craig Kennison at Baird lowered the price target on Camping World Holdings, Inc. (NYSE:CWH) from $40 to $35 with an Overweight rating. Due to an uncertain economic outlook and expected inflation ahead, consumers are expected to cut down on discretionary expenditures like spending on RVs. During Q1 2022, Camping World Holdings, Inc. (NYSE:CWH) missed earnings forecasts due to high selling, general, and administrative (SG&A) expenses.
As of Q1 2022, 16 funds held a stake in Camping World Holdings, Inc. (NYSE:CWH) as of Q1 2022.
1. Beyond Meat, Inc. (NASDAQ:BYND)
Number of Hedge Fund Holders: 23
Float Shorted: 43.52%
Stock Price as of June 14: $22.27
Beyond Meat, Inc. (NASDAQ:BYND) is a Los Angeles, California-based developer and manufacturer of plant-based meat alternatives. The company announced on June 14 that its Cookout Classic value pack is available across 10,000 stores of notable retailers nationwide.
Traders shorting Beyond Meat, Inc. (NASDAQ:BYND) stock have been encouraged by a research note issued by Michael Lavery at Piper Sandler on June 7. The analyst maintained an Underweight rating on Beyond Meat, Inc. (NASDAQ:BYND) with a $12 target price. He highlighted that the positive response to the recently launched jerky is masking the overall slowdown in demand for the company’s products. Lavery does not have a positive stance on the rollout of the jerky and its success as opposed to the company’s previous launches in different categories.
Here’s what Singular Research said about Beyond Meat, Inc. (NASDAQ:BYND) in its Q3 2021 investor letter:
“BYND also was a low performer as the company warned of lower sales in the third quarter due to the delta variant and supply chain disruptions. The firm was also downgraded by Credit Suisse to Underperform from Neutral.”
Of the 912 hedge funds in Insider Monkey’s database, 23 funds held a stake in Beyond Meat, Inc. (NASDAQ:BYND) as of Q1 2022.
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