Short sellers are betting on the Aconex Ltd share price falling

Aconex Ltd (ASX:ACX) is dividing the ASX bulls and bears.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in software-as-a-service engineering and construction business Aconex Ltd (ASX: ACX) are trading flat at $3.75 today and have collapsed in half over the past year as the market struggles to value a business that hit the ASX boards in December 2014.

Just over a year ago Aconex shares changed hands for around $8.30, but today sell for just $3.76 with a group of traders, hedge funds, and speculators betting heavily on the share price falling further.

In fact around 11 per cent of Aconex stock has been short sold by traders who expect to buy the stock back cheaper in the future, before returning it to its legal owners.

Fuelling the short selling are the company's large acquisitions and valuation around $737 million, versus an EBIT loss of $3.8 million for the six-month period ending December 31 2016.

Aconex is forecasting full year EBITDA (operating income) of $15 million to $18 million, before adjusting for integration costs related to its recent acquisition spree. Full year revenue is forecast to come in at $160 million to $165 million, with the company boasting it can deliver more than 20 per cent revenue growth "over the medium to long-term".

Given its decent potential, but arguably large valuation and substantial short interest, Aconex shares could be volatile when it hands down its profit report later this month.

Motley Fool contributor Tom Richardson has no position in any stocks mentioned. You can find Tom on Twitter @tommyr345 The Motley Fool Australia owns shares of ACONEX FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »