Oil company Chevron emerged as the most shorted U.S. stock in April, surpassing the long-time leader Tesla. This shift occurred as short-sellers increased their bets on declining energy prices, according to a monthly report by data and tech firm Hazeltree.
Chevron claimed the top spot on Hazeltree’s Shortside Crowdedness Report, which ranks the most shorted large-cap stocks in the U.S. The report is based on global stock borrowing data from approximately 700 asset management funds.
Despite consistently being the second most shorted stock in the prior three months, April saw a significant increase of over $500 million in Chevron’s stock used for shorting, raising the percentage to about 9% from the previous month’s roughly 7%.
Chevron’s first-quarter results fell short of Wall Street consensus estimates, affected by weak energy prices and declining refining margins over the past year. Additionally, an oversupply of natural gas and a milder-than-expected winter drove down natural gas prices, further impacting earnings.
Despite these challenges, Chevron’s shares rose by 1.38% in April, adding around $5 billion to its total market value, according to LSEG Datastream. A short position is essentially a wager that a company’s stock price will decrease.
Meanwhile, hedge funds monitored by Goldman Sachs reduced their exposure, closing both long and short positions in the week leading up to May 10, as reported in a recent note from the bank’s prime brokerage.
In contrast, the New York Stock Exchange composite index, which includes Chevron saw a decline of about 3% in April.
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