The most shorted ASX shares tell investors which companies professional investors expect to suffer.
The latest short position reports from ASIC, covering the week to 1 September 2026, contain two names that have each had their respective issues.
One company is shorted because it is losing money.
The other is shorted because it made too much, too quickly.
Image source: Getty Images
The most shorted ASX shares right now
DroneShield Ltd (ASX: DRO) sits at the top of the list with 15.37% of its register sold short.
Lotus Resources Ltd (ASX: LOT) follows at 15.04%, then 4DMedical Ltd (ASX: 4DX) at 12.37%.
Domino's Pizza Enterprises Ltd (ASX: DMP) is at 11.98% and Treasury Wine Estates Ltd (ASX: TWE) at 11.74%.
The week-on-week movement is worth noting.
CAR Group Limited (ASX: CAR) has dropped out of the top ten entirely, and Elders Ltd (ASX: ELD) has taken its place.
DroneShield's short interest actually rose, from the 14.9% recorded a week earlier, despite the shares already having fallen sharply.
DroneShield: Shorted because it lost money
DroneShield has become the most shorted stock on the market for reasons that become clearer when investors look at the company's annual accounts.
First-half revenue rose 74% to $125.8 million, which is a strong number.
Underneath it, gross margin fell from 65.3% to 60.0%, underlying EBITDA swung to a $12.4 million loss, and the statutory result was a $32.2 million loss, compared with a $2.1 million profit a year earlier.
The company also has an ASIC investigation running into share trading and disclosures from November 2025.
The counter-argument is that the balance sheet is untouched.
DroneShield holds $180 million of cash with no debt and has reaffirmed FY 2026 revenue guidance of $250 million to $270 million.
The shares are down about 74% from their high, which is a lot of scepticism already in the price.
PLS Group: Shorted because it made too much
PLS Group Ltd (ASX: PLS) is the opposite case entirely.
FY26 revenue rose 152% to $1.93 billion, underlying EBITDA reached $1.14 billion at a 59% margin, and the company swung from a $196 million loss to a $526 million profit.
The company resumed dividends with a fully-franked 5 cents per share.
Shares rocketed 30% in August alone and have roughly doubled over twelve months.
So why short it?
Because the result rests on a realised spodumene price of US$1,488 per tonne, more than double the prior year.
FY27 capital expenditure is guided at $620 million to $685 million, roughly double the prior year, which competes directly with the dividend just restored.
Lithium has always been a violently cyclical business, and bears are betting the cycle turns before the capital is spent.
Managing director Dale Henderson said of the results:
That financial strength gives us flexibility: we can continue investing in Pilgangoora, bring Ngungaju back into production, advance P2000 and Colina, and pay a fully franked final dividend of 5 cents per share.
Foolish takeaway
Short interest is a reading list, not a verdict.
Plenty of heavily shorted companies go on to perform perfectly well, and a crowded short position can unwind violently.
What I take from this particular table is that the most shorted ASX shares are not all the same bet.
For DroneShield, the question is profitability, and for PLS Group, it is the lithium price.
