Bloomberg reports that short selling in green stocks has been increasing and is nearly four times the short selling in the S&P. In November, 17% of shares in the 35 stocks that make up the Wilderhill New Energy Index are sold short, up from 16% last month and 15% in September. That compares with the 4.4% short ratio of the stocks that make up the S&P.
Among the most heavily shorted stocks are Zoltek (ZOLT) and American Superconductor (AMSC), both of which make components for wind turbines. Wind energy capacity increased at the slowest rate in three years this year. The top three most heavily shorted green stocks are Tesla Motors (TSLA) at 65%, First Solar (FSLR) at 25% and Sunpower (SPWRA) at 22%
A few traders highlighted the lack of international agreement on climate change policies and the reduction in subsidies in many key markets, not to mention Republican control of the House here in the US. Republicans have said they will look to roll back rules limiting carbon venting, ease curbs on coal mining and block subsidies for clean energy. This is certainly one area where Obama has failed in a big way. He was successful in ramming through other initiatives such as healthcare, but green energy just hasn’t been as important as the hype would have you believe.
American Superconductor’s main business is in China, and their new order for superconductor cable is from Korea, so American concerns are not very relevant. Since 40% of electricity is lost in transmission, installing 0% loss superconductor cable would save a fortune in new generation capacity, even if Republicans want to continue spewing mercury into the food chain.