The short interest in Ford skyrocketed in December. The number of shares sold short was up 43.2 million from the previous month to 145 million. That is a big move both absolute and in percentage terms.
The shorts could be making several bets. First, that Ford is taking too much of a risk by pledging most of its assets to pick up $23 million in debt to help with the company’s restructuring.
Ford’s market share in the US is also falling like a rock. It now stands at 16% and the company believes that could drop to 14% next year. Edmund’s, the car research group, says that Ford’s incentives per car now run at over $4,000.
All of this raises the question of whether Ford can cut enough to catch the falling knife of dropping sales.
Ford’s stock is down from $8.50 to $7.40 in the last month. Bringing in a CEO from Boeing has not helped much, so some investors are willing to bet that F will go lower.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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