Morning Brief: Tesla Is Most Shorted Stock Again
The company some hedge funds love to hate is officially more shorted than Apple, new research finds.
Tesla is once again the most heavily shorted stock. The controversial electric car maker has reclaimed the top spot, moving ahead of Apple, according to S3 Partners. The analytics firm points out that two weeks after Tesla hit its 2018 high of $357.42 on February 26, the number of shares shorted fell to their year-to-date low on March 6. From February 26 to April 2, the stock slumped nearly 30 percent.
“With Tesla’s stock price on a downward trajectory short sellers began to short into the price weakness, keeping their short exposure over the $9 billion level until Tesla’s stock price cratered in late March,” pointed out Ihor Dusaniwsky, managing director of predictive analytics for S3 Partners, in a recent report. He noted that over the past month, short interest rose $1.7 billion, to $10.7 billion. Since that April 2 low, the stock has surged 19 percent. Through this wild ride, Tesla short sellers are slightly down for the year, according to S3. Of course, David Einhorn’s Greenlight Capital famously has a short position in Tesla.
Rounding out the most heavily shorted stocks are Apple, AT&T, Alphabet, Amazon.com, Netflix, Facebook, Microsoft, and Intel.
York Capital Management Global Advisors and Valinor Management and each disclosed in separate regulatory filings that they have entered into a backstop agreement with NextDecade Corporation, a liquefied natural gas (LNG) development company. Under its deal, York, headed by Jamie Dinan, said it agreed to purchase $23.2 million, or 23,200 shares, of convertible preferred stock with detached warrants in connection with the company’s convertible preferred equity offering. As part of the arrangement, NextDecade agreed to issue to York 144,856 shares if the closing occurs within 30 days after the backstop agreement date and additional shares if the closing occurs at a later date.
Under its deal, Valinor, the hedge fund firm headed by David Gallo, agreed to buy up to $7.955 million, or 7,955 shares, of convertible preferred stock with detached warrants in connection with the company’s convertible preferred offering. As part of the deal, Valinor was to receive 49,671 common shares if the closing occurs within 30 days after the backstop agreement date and additional shares if the closing occurs at a later date.
In each case, NextDecade also agreed to issue to both York and Valinor an amount equal to 2.75 percent of the portion of the backstop amount, which will be paid in shares priced at $4.80 per share. NextDecade was created last July through a merger with blank-check company Harmony Merger Corp.
Boothbay Fund Management said in a regulatory filing that it owns one million shares of Tiberius Acquisition Corp., or 5.33 percent of the blank-check company. Tiberius says in a press release it is looking to do some sort of deal in the insurance sector.