Short interest in Ford Motor (F) was already extraordinarily high in December, but this month it rose over 30 million shares to sit at 175 million. The figure stands in contrast to Ford’s shares which have moved from $6.85 on December 13 to $8.30 on Friday. Perhaps as Ford inches toward it 52-week high more investors are willing to bet against further progress.
Ford’s new CEO has said that the company’s restructuring is ahead of schedule. And, lower gas prices could give a longer shelf life to gas guzzling vehicles in Ford’s SUV and pick-up product lines. Ford’s market share last year was 17.5% in the US, but the company has used a figure as low as 14% as a bottom point for sales before the company can begin to recover.
The Ford bet is a simple one. The company will almost certainly be able to fire enough people and close enough plants to hit its cost reduction targets. With $23 billion in new debt, the chances that the company will have cash problems this year or next seem fairly small.
But, the short community may have the feeling that, with Honda (HMC) and Toyota (TM) gaining market share in the US almost every month, that Ford cannot resurrect its unit sales in time to save the company.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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