In this update on the short selling of shares in Canadian public companies, we report on:
- Largest short positions
- Largest increases in short positions
- Largest short positions for exchange-traded funds (ETFs)
- Short squeeze candidates
- A report by an activist short seller on Brookfield Infrastructure Partners
- ·End note on data sources
Largest short positions
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Largest increases in short positions
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Largest short positions for exchange-traded funds (ETFs)
Short interest in ETFs can provide an indication of bearish sentiment at sector levels.
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Short squeeze candidates
While short positions tend to warn of underperformance in a stock, short sellers can unintentionally push stock prices higher if they rush to buy back the shares they borrowed. Such panic buying can be triggered by mounting losses, higher borrowing costs and other factors.
These factors have been combined by data firm S3 Partners into an algorithm, called the Short Squeeze Score, to rank companies by the likelihood of a short squeeze — with 100 being the highest probability and 0 being the lowest.
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A report by an activist short seller on Brookfield Infrastructure Partners
From the world of activist short sellers comes a Jan. 29 report on Brookfield Infrastructure Partners (BIP-UN-T), written by Keith Dalrymple at DF Research. He claims the company, which acquires and manages infrastructure assets, is improperly valued:
“On one side, we have the IFRS book value NAV, which stands at ~$10/unit as of 3Q24. On the other, we’ve seen wild estimates from investors and the sell−side ranging from $27 to $42. At IFRS NAV, units trade at a staggering 3.2x NAV in 3Q24 . . . . The entire financial model —constant acquisitions, ever-rising distributions—would likely collapse if units traded at NAV.”
End note on data sources
S3 Partners was the main source for short-sales data. It was selected because Canada has many companies interlisted on exchanges in the United States, and S3 Partners sums short positions (currency-adjusted) across both countries. Other data sources for short sales data don’t do this. A cutoff was applied to exclude companies whose short positions were miniscule in dollar value. Note that short positions, regardless of data source, may not be purely bearish bets because of trades made for hedging or arbitrage reasons.
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