Looking at the overall market, Lucid Group Inc (LCID) was the second most shorted stock behind SoFi Technologies Inc (SOFI) over the last two weeks, with 11.7 million new shares shorted. For the year, LCID’s number of shares shorted has increased by 20.4 million shares, worth $469 million (a +23% increase), as its stock price fell -40%. LCID’s short interest is $2.53 billion, 110.5 million shares shorted, SI % Float of 20.87%, while the S3 SI % Float, which includes the synthetic longs created by every short sale in the Float denominator, is 17.27%. Stock borrow rates are at 16.32% and rising.

We follow 81 shorted U.S. listed auto manufacturer stocks with total short interest of $31.80 billion. Short selling in the sector is one of the most concentrated on the street with the top twenty most shorted stocks totaling $31.10 billion of short interest, making up 98% of the total shorts in the sector. LCID is the second largest short in the auto manufacturer sector.

U.S. Auto Manufacturers Short Interest as of 03.14.22

Over the past thirty days we have seen +$311 million of new short selling in LCID, the largest increase of short selling in the auto manufacturers sector. For context, perennial sector short interest leader Tesla Inc (TSLA) has $60 million worth of short covering over the past thirty days.

U.S. Auto Manufacturers - Increase in Shares Shorted: LCID Tops the List over the Last 30 Days

* Represents dollar value of the change in shares shorted, calculated by # of shares shorted multiplied by stock price as of 03.14.22

The auto manufacturer sub-industry has been a very profitable sector to short in 2022. In dollar terms, the sector ranks number two behind the application software sub-industry. In percentage terms, the auto manufacturer sub-industry ranks number eight. Short sellers in the auto manufacturer sector are up $13.07 billion of mark-to-market profits in 2022, up +35.2% for the year. LCID shorts were the third most profitable in dollar terms, up +$1.37 billion for the year.

U.S. Auto Manufacturers: LCID is the Third Most Profitable Short of 2022 (as of 03.14.22)

Only one stock is down more than $1 million in year-to-date mark-to-market losses in 2022. Faraday Future Intelligent Electric Inc (FFIE) shorts are down -$9.6 million in 2022, down -10.34% for the year.

High Short Interest as a % of Float is a factor in the “crowdedness” of a shorted stock. Higher numbers can have negative effects on stock loan liquidity as well as trading liquidity. The following are U.S. listed automotive manufacturer stocks with highest SI % Float and short interest over $25 million. The average domestic SI % of Float is 5.01% versus the auto manufacturer sub-industry’s 5.83% while the average S3 SI % Float, which includes the synthetic longs created by every short sale in the Float denominator, is 4.52% for all domestic stocks versus 5.12% for auto manufacturer shorted stocks. Stocks in the auto manufacturer sub-industry, on average, are more crowded that the overall market when comparing SI % Float. LCID has the fifth largest SI % Float in the auto manufacturers sub-industry.

Auto Manufacturer Stocks with the Largest Amount of Short Interest (as of 03.14.22)*

* Represents names with over $25 million of short interest

The definition of a “crowded” short trade varies from investor to investor, but there are several themes that remain constant. A short can be considered “crowded” if some or all of the following occur: there are large amount of dollars at risk on the short side, a large proportion of a stock’s float is being shorted, there is illiquidity in the stock loan market and\or there is illiquidity in the trading market.

There are five stocks in the auto manufacturer sub-industry that can be considered as very crowded. LCID’s large dollar short interest ($2.5 billion), high stock borrow fee (16.32% fee and rising versus U.S average of 0.66% fee), high S3 % Float (17.27% versus 4.57% U.S. average), and slightly above average Days to Cover (3.72) make it the fourth most crowded stock in the auto manufacturer sub-industry.

The Most Crowded Auto Manufacturer Shorts (as of 03.14.22)

Not every Crowded stock is a Squeeze candidate. By overlaying our Squeeze algorithm over our Crowded Score, we can determine which U.S. traded stocks have the highest potential for a Squeeze, and which do not.

Auto Manufacturer Stocks Most at Risk of a Short Squeeze (as of 03.14.22)

LCID is a crowded short and squeezable only due to the large size of the short and expensive stock borrow fees. Recent profitability precludes LCID shorts from getting squeezed right now, but the stock should be on a trader’s and\or CRO’s radar just in case its stock price begins to trend upwards, and shorts look to realize their profits and begin buying to cover. In the meantime, with continued price weakness in the stock, we should see continued short selling along with long shareholders selling their shares in order to get out of a losing position.