LAC shorts build as index deletion risk looms

Lithium Americas Corp. heads into its November 13 earnings with short interest at a one-month high, borrow availability tight, and an 85% probability of being dropped from the S&P/TSX Composite in December.

The short position has grown sharply. Short interest climbed 31% over the past month to reach 7.1% of the free float, with the bulk of that move coming in the final two weeks of October. Roughly 1.5 million additional shares were added to the short book between October 19 and October 27 alone. Borrow availability has tightened in parallel, falling from above 45% in late September to 8.8% now. The 52-week low on availability was 3.4%, hit on October 13, so the lending pool is not fully exhausted, but it is running considerably tighter than it was just six weeks ago. Cost to borrow remains modest at 1.33%, up 56% over the past month but still low in absolute terms. The short score sits at 58.6, the highest reading in the ten-day history provided. Together, the picture is one of building conviction among short sellers rather than opportunistic positioning.

The index angle adds mechanical weight to that bearish tilt. ORTEX forecasts an 85% probability that LAC fails the S&P/TSX Composite's retention screen on weight at the December 2026 Quarterly Review, with a rank date of November 20 and a potential trade date of December 18. The estimated selling flow for index trackers is $23 million, equivalent to about 1.1 days of normal volume. In the 16 comparable past deletions tracked by ORTEX, the median move from announcement to effective date was -0.5%, though 62% moved in the expected direction and trade-day volume ran at 9.7 times normal. The announcement date, if the forecast proves correct, would be December 4.

The Street's view is hard to square with the price. Earlier notes referenced analyst consensus implying 152% upside from levels around this current CAD 3.04 close, a gap that speaks to disagreement between fundamental value models and near-term sentiment rather than any clear resolution. The stock is down 22% over the past month and roughly 50% year-to-date. The price-to-book multiple of 0.53 reflects the market discounting the Thacker Pass project's construction risk heavily. EPS momentum over 30 days ranks in the 79th percentile, a positive if narrow signal. The short score ranks in just the 6th percentile of the universe, meaning the stock scores worse on short-squeeze potential than 94% of its peers. Days-to-cover ranks in the 7th percentile. Positioning looks decidedly bearish, not merely cautious.

The ownership picture carries its own complications. General Motors Holdings filed a Schedule 13D/A in February, signalling activist-level engagement, though its stake has fallen from 6.87% to 4.94% as last disclosed. That drop below 5% is notable: under SEC rules, a holder at that level may not need to file again if they exit further. Ganfeng Lithium has similarly trimmed from 9.3% to 3.5% as last disclosed. Van Eck Associates remains the largest institutional holder at roughly 6.3% of shares as of September, and Orion Resource Partners holds 8.8% as last disclosed in February. The strategic holders are shrinking their positions, not adding. On the insider side, a cluster of option exercises (transaction type M) occurred on October 24 across several executives including the Executive Chair, but these are compensation mechanics rather than open-market purchases, and carry no dollar value in the data.

Peers caught a strong bid on the day: CRML surged 27% and NB gained 18%, which contributed to LAC's own 8.2% single-day bounce on October 27. The week as a whole was nearly flat for LAC at just under 1%, so the Friday move reversed earlier weakness rather than representing a sustained re-rating. With earnings on November 13 and the TSX index rank date on November 20, the next three weeks carry two distinct binary events for the stock, one fundamental and one mechanical.

What to watch: whether short interest continues to build into the November 13 print, whether GM or Ganfeng file any updated 13D/G disclosures suggesting further stake changes, and whether the stock recovers enough ground before November 20 to affect ORTEX's deletion probability heading into the TSX review.