In a surprising turn of events, ExxonMobil Corp XOM has now overtaken Tesla Inc. TSLA to become the most shorted large-cap stock in the S&P 500, according to a recent report by HazelTree.
What Happened: Prior to last month, Tesla had held the title of being the most shorted stock for four consecutive months, as investors anticipated a drop in the company’s share price, as reported by Business Insider.
Using a “Crowdedness Score” to rank short bets, HazelTree has awarded ExxonMobil a score of 99, the highest level, indicating shares shorted by the highest percentage of funds tracked by the firm. Tesla trails slightly behind with a score of 97. The firm’s comprehensive data collection covers 12,000 global equities and over 700 funds.
Short selling is a common practice where investors bet against a particular stock by borrowing shares, selling them, and then repurchasing them at a lower price to return to the lender, thus pocketing the difference. HazelTree measures the “hotness” of a stock based on the supply and demand dynamics from short sellers.
In terms of institutional supply utilization, Rivian Automotive RIVN is leading far ahead with 37%, a figure significantly higher than ExxonMobil’s 3.13% and Tesla’s 2.67%. Even though Tesla has witnessed an impressive growth of 76% this year, it is currently facing challenges due to uncertain demand for electric vehicles and rising competition.
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