These are the 10 most shorted ASX shares

Why are short sellers betting big on these ASX shares dropping in value?

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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:

  • Pilbara Minerals Ltd (ASX: PLS) continues to be the most shorted share with a short interest of 13.1%, which is up week on week. Collapsing lithium prices are weighing heavily on this miner and the rest of the industry.
  • Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 10.9%. Traders seem to be betting on integration issues arising from this gold miner's recent acquisition spree.
  • Syrah Resources Ltd (ASX: SYR) has a short interest of 10.7%, which is up week on week again. Weak graphite prices are likely to be behind this high level of short interest.
  • Liontown Resources Ltd (ASX: LTR) has jumped into the top ten with a short interest of 9.9%. Short sellers appear convinced that Albemarle Corp (NYSE: ALB) will not follow through on its takeover proposal now Gina Rinehart has a blocking stake.
  • Flight Centre Travel Group Ltd (ASX: FLT) has 9.7% of its shares held short, which is up slightly week on week. Revenue margin headwinds and consumer spending concerns could be behind this.
  • IDP Education Ltd (ASX: IEL) has 9.3% of its shares held short, which is up week on week. This may be due to the loss of its monopoly in the Canadian market, visa changes in Australia, and Canada-India tensions.
  • Core Lithium Ltd (ASX: CXO) has a short interest of 9.2%, which is up week on week. Weak lithium prices and disappointing guidance have been weighing heavily on its shares.
  • Sayona Mining Ltd (ASX: SYA) has 8.7% of its shares held short, which is up week on week. Once again, this appears to have been driven by falling lithium prices.
  • Appen Ltd (ASX: APX) has seen its short interest rise to 8.4%. This artificial intelligence data services company's performance in recent years has deteriorated materially due to rising competition. Short sellers don't appear to believe things will change in a hurry.
  • Mesoblast Ltd (ASX: MSB) has a short interest of 8%, which is up since last week. Short sellers appear to believe this stem cell-focused biotech company will struggle to gain US FDA approval for its products.

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 Appen and Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. 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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