Insights

Why are Webjet (ASX:WEB) shares still being shorted in November?

What’s going on with Webjet’s short sellers?
The post Why are Webjet (ASX:WEB) shares still being shorted in November? appeared first on The Motley Fool Australia. –

When it comes to the S&P/ASX 200 Index (ASX: XJO), it goes without saying that some shares are more beloved than others. Much is often made of the special attachment ASX investors have to the big four bank shares for example. Or else, long-time ASX stalwarts like BHP Group Ltd (ASX: BHP) or Woolworths Group Ltd (ASX: WOW). But we can’t exactly say that about the Webjet Limited (ASX: WEB) share price.

Why? Well, Webjet shares have been frequenting the list of the most shorted ASX shares for a while now. My Fool colleague James takes a look at the most shorted ASX shares every week. And every week so far this November, Webjet has made the list of the 10 most shorted shares on the sharemarket. Throw in the last week of October, and we seem to have a company which investors are singling out as a lucrative short-selling target.

Why does this matter? Well, short selling is the practice of ‘borrowing’ another investors shares with the promise of returning them at a set date in the future. The shortseller then sells the shares upon receiving them, hoping to buy back those same shares at a later point for a cheaper price and return them to their owner. Thus, a successful ‘short’ relies upon a company’s share price falling over the period the investor has chosen to short the share.

As such, a short is essentially a bet that a company’s share price will fall. By extension, this means that investors appear to be not too bullish on Webjet’s short-to-medium term prospects. That’s given this company has topped the top 10 most shorted ASX shares for several weeks in a row now.

Why are Webjet shares still topping the shortseller’s Christmas list?

So why might investors be betting the Webjet share price has more downside in front of it than upside? Well, the company is scheduled to deliver its results for the first half of its FY2022 on 25 November, next Thursday. The travel industry is showing some green shoots and full-scale international flights are scheduled to resume in the next few months. Even so, the travel industry is still a long way from where it was in the pre-COVID world. And we also have the impacts of the most recent bout of lockdowns to consider, especially in Sydney and Melbourne.

Perhaps the short sellers are looking at the Webjet share price as well. Even though Webjet has taken a hit today, Webjet shares are still up an impressive 21.2% year to date in 2021 so far. They are also up 22.4% over the past 12 months. By contrast, the ASX 200 has only managed 11.6% and 15.05% respectively over the same periods. Perhaps shorts are betting that these gains have come too quickly.

Whatever the reason why so many investors are short selling this company, time will only tell if their bearish bets will pay off.

At the current Webjet share price of $6.21, this ASX travel company has a market capitalisation of $2.4 billion.

The post Why are Webjet (ASX:WEB) shares still being shorted in November? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Webjet right now?

Before you consider Webjet, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Webjet wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These are the 10 most shorted ASX shares

2 ASX shares that may be too good to ignore

The Webjet (ASX:WEB) share price was $12 before COVID-19 hit. Can it ever get back there?

These are the 10 most shorted ASX shares

Here’s why travel shares led the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!