IDP Education (ASX:IEL), a company that ultimately trains up foreign students moving to Australia but also runs international language schools, has long been one of the most shorted stocks on the ASX.
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According to publicly available short-selling data heading into Sydney’s afternoon trade, shorters remain heavily exposed to the stock.
Nearly 13% of all shares in IDP Education are shorted, and that number of shorts has been trading sideways for a good while, pointing to apparent solid conviction amongst those entities anticipating IEL to keep falling.
That calculus has long been driven by macro trends (read: lockdown), and shorters may or may not have a point. Just consider that IEL, despite a $1.29B cap, is down -63% YTD.
But we’ve also seen, in very recent history, that macro trends can also provide upside. Or at least, regulatory decisions from Canberra.
IDP jumped +10% on Monday intraday, bringing one-week returns to just shy of +30%. That followed another strong run last Friday, and that’s because Canberra has allowed an extra 25,000 foreign students to come to Australia in 2026.
And that wasn’t something investors had to do their own research to find out; IDP released it through its investor relations channels. The company also pointed out that TAFE-like courses for foreign students are being re-jigged in 2027.
In response to a consultation window for Australia’s 2021-2030 international education strategy, the company outlined in a submission that it wanted to further grow student pipelines to Australia and said it wasn’t overly keen on online learning becoming the major format.
So it’s no secret the company ultimately relies on foreign students coming to Australia for its bread and butter. Despite an international presence, it’s only listed here, and really, the company talks a lot about Southeast Asia.
So, can the company make back its CY2025 losses and prove the shorters wrong? That may depend on whether or not the company really can pin down solid revenues in bricks-and-mortar learning, and, presumably, turn the government’s changes into cash in the bank.
And it will be a while yet before we find out if that’s the case. But it’s true to say that right now, it’s been a pretty good week for anyone who bought IDP in early August.
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It could be worth thinking about where, exactly, we’re going to house an extra 25,000 foreign students, though.
IEL last traded at $4.65/sh.
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