| Short Squeeze wird kommen, die Frage ist nur wann! http://www.dataexplorers.com/news-and-analysis/short-interest-50-renewable-energy Short interest up 50% in renewable energy Tue, 2011-05-31 16:36 Shares in solar energy and wind power equipment makers gained sharply in response to Germany’s announcement to the phase out of its nuclear power stations over the next decade, reports the Wall Street Journal. A battle between the bulls and bears rages in this sector as institutional investors continue to increase their long term holdings and short sellers persistently build their positions. Short interest across the Alternative Energy sector averages 11% of total shares outstanding on loan. This is up by 50% over the last month and is over four times higher than the average across the S&P500. Germany’s Q-Cells SE (ETR:QCE) is the company with the largest percentage of stock on loan and dense short selling activity can be seen in Chinese stocks, JinkoSolar Holding Co. Ltd (NYSE:JKS) and STR Holdings, Inc. (NYSE:STRI). US listed SunPower Corporation (NASDAQ:SPWRA) and First Solar (NASDAQ:FSLR) round out the list of top stocks seeing the highest percentage of shares on loan. The short interest and long supply can be observed from a global peer comparison using the Bloomberg RV function. 
Drill down The share price of First Solar has fallen by 30% since reaching an annual high in February following the earnings announcement. This prompted short sellers to build their positions from 17% to 22% of total shares outstanding on loan, which represents almost 90% of the supply of shares that can be borrowed. Yet on the long side of the market, funds who lend have continued to increase their total holdings to almost a quarter of the total s 
Most shorted in Germany Short selling activity gained momentum in Q-Cells following Germany’s decision to cut government subsidies in the renewable energy sector last year. The shares were trading at unprecedented lows but have surged by almost 20% since Germany’s u-turn to support the industry. Short interest reached an annual high in mid-April at 52% of total shares outstanding on loan, with more than 90% of the total lendable supply out on loan. Shorts have since covered slightly to 49% of total shares. While convertible arbitrage inflates the amount of stock on loan, a substantial volume of directional short selling remains in place in this volatile stock. 
Bottom line Short sellers have remained firm in their convictions regarding this sector for an unusually long period of time, having increased their positions substantially over the last month. Yet institutional long only investors have added 11% to their holdings over the same period. The u-turn by Germany to phase-out nuclear power has left a lingering positive sentiment as share prices of solar stocks rally. With so much political meddling in the economics surrounding the pricing and demand for renewable energy, it remains unclear whether investors believe that this positive sentiment is sustainable and whether other countries will follow Germany’s lead? |
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