Shorts are up by about 150% since November, now sitting around 5.5%. The shorters have deeper pockets than WEB's buy-back, so I'm guessing it will continue. which is why I sold out. Nothing wrong with the company, but there are a few reasons I'm wary of it:
(1) WEB has been shorted heavily since the pandemic, for years being either the most-shorted stock, or in the top 10, on the ASX. Shorts dipped for a while and are now climbing quickly.
(2) Australia, USA and likely all other nations are either already in recession or it's coming soon, depending on how you define it. I would think this will have an impact on discretionary spending and hotel bookings, and personal travel – also business – will be affected. Combined with cost-of-living pressures and the cost of tariffs on global business, it's not a good recipe for travel companies.
(3) FLT, CTD, HLO and other travel companies other than QAN have delivered underwhelming results in the last reporting season (depending on the figures you like to look at). Not that WEB has to follow suit, but the other companies are good guides.
Whether or not the shorting is justified (i.e they know something we don't and are betting on a poor or ordinary result coming), I don't think a company can withstand the kind of prolonged shorting that WEB has been subjected to for years. I hope they deliver great results and the shorters get burned, but for me it was too risky to stay in.
WEB Price at posting:
$4.38 Sentiment: None Disclosure: Not Held
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