Bears Circle Carvana and Auto Credit as Short Pressure Mounts

Fresh ORTEX data published today puts two car-market names at the centre of short-seller attention, while credit stress signals add weight to the bearish case.

Carvana carries a short interest of 9.4% of its free float. That figure looks modest on its own. Paired with alt data, it takes on a sharper edge. ORTEX consumer credit data shows delinquencies in Carvana's ABS trusts running 4.6 standard deviations above their own history as of 15 October. That is the largest outlier reading in the entire consumer credit dataset. A second signal comes from Banco Santander, whose ABS trust delinquencies are 3.3 standard deviations above their own history over the same period. Both readings point to stress building in US auto loan pools.

Hertz is under even heavier short pressure. Short interest stands at 73.5% of free float, with a cost to borrow of 149.6% and zero shares available to borrow. Its ORTEX short score is 86 out of 100. The stock has lost 63% so far this year.

Wolfspeed shows the most extreme positioning in the group. Short interest is 88.6% of free float. Availability of shares to borrow is also at zero. The ORTEX short score sits at 78. The semiconductor maker is already down sharply and faces a potential Russell 2000 deletion in the December review, with ORTEX's Index Rebalance Radar putting deletion odds for nearby names sharply higher after today's rank date.

Lucid Group rounds out the cluster, with 65.1% of its free float sold short and a cost to borrow of 15.9%.

Short sellers appear to be using the auto credit stress as a macro backdrop for individual name selection. With zero shares available to borrow in both Hertz and Wolfspeed, any forced covering could move prices sharply.