Here are the 10 most shorted ASX shares

Here's why short sellers are betting on these ASX shares dropping in value.

A woman holds her hands to her face in shock and fear with a worried expression on her face as many ASX 200 shares hit 52-week lows today

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At the start of each week, I like to look at ASIC's short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

  • Flight Centre Travel Group Ltd (ASX: FLT) continues its long run as the most shorted ASX share after its short interest rose slightly to 11.8%. Short sellers aren't giving up on this one despite a recent trading update coming in strong. Revenue margin headwinds appear to be the chief concern of short sellers.
  • Zip Co Ltd (ASX: ZIP) has short interest of 10.25%, which is down week on week. Profitability and regulatory concerns seem to be behind this.
  • Core Lithium Ltd (ASX: CXO) has short interest of 8.8%, which is down week on week. Short sellers will be frustrated to have seen this lithium miner's shares rocket higher last week after further M&A activity in the industry.
  • Jervois Global Ltd (ASX: JRV) has 8.6% of its shares held short, which is down week on week. The suspension of the final construction of the Idaho Cobalt Operations has hit this company's shares hard.
  • Sayona Mining Ltd (ASX: SYA) has seen its short interest ease to 8.5%. Sayona Mining's shares also rose strongly last week amid further lithium M&A activity.
  • Pointsbet Holdings Ltd (ASX: PBH) has 8.45% of its shares held short, which is up slightly week on week. Short sellers appear concerned by this sports betting company's huge cash burn in a highly competitive industry.
  • Lake Resources N.L. (ASX: LKE) has 8% of its shares in the hands of short sellers, which is down since last week. An almost 20% gain last week by this lithium developer's shares will have been hard for short sellers to take.
  • AMA Group Ltd (ASX: AMA) has 7.7% of its shares held short, which is down week on week. This smash repair company's balance sheet is in a very precarious state.
  • Temple & Webster Group Ltd (ASX: TPW) has seen its short interest ease to 7.6%. Traders appear to believe the housing market downturn and a return to offline shopping could mean this online retailer underperforms.
  • Megaport Ltd (ASX: MP1) has seen its short interest fall again to 7.4%. Short sellers have been closing positions since this network as a service company released a very positive trading update and guidance.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport, PointsBet, Temple & Webster Group, and Zip Co. The Motley Fool Australia has recommended Flight Centre Travel Group, Megaport, PointsBet, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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