Cars and Drivers

Short Interest in Ford Soars as Company Struggles

Paul Ausick

Published: February 12, 2018 10:30 am

Last Updated: January 12, 2020 3:29 am

Betting that shares of Ford Motor Co. (NYSE: F) would drop has been paying off for so far in 2018. As of last Friday, shares had retreated nearly 15% after reaching a new 52-week high in early January.

A lot of investors noticed the nearly vertical drop in Ford’s share price. Short interest in Ford rose 22% in the two-week reporting period ended January 31 to 139.27 million shares, which is about 3.8% of the company’s float. It would take two days to cover all short positions.

Ford stock posted a new 52-week low last Tuesday, and if the company had not announced Monday morning that it plans to build more big sport utility vehicles in the United States, shares would probably have dipped again, despite what appears to be another day of strong demand for equities.

Full-year 2017 sales dipped 1.1% year over year. Sales totaled 2.587 million units, compared with 2.615 million sold in 2016. Passenger car sales dropped 14.2%, while SUV sales rose 2.9% and truck sales rose 4.3%.

In January U.S. sales dropped 6.6% and sales in China crashed 18%. That’s a lot of misses for a company to announce in one month, and it has given longs the heebie-jeebies and shorts an opportunity to make some serious cash.

Ford stock traded up about 0.5% Monday morning at $10.58, in a 52-week range of $10.19 to $13.48. The 12-month consensus price target is $12.32.