The UAW is asking Ford Motor and the other two automakers with roots in Detroit for big pay increases and a four-day work week. The requests threaten to upend industry cost structures, giving non-unionized electric vehicle makers a leg up.Short sellers will borrow stock they do not own and sell it, hoping the price declines and they can buy it back later at a lower price. A short sale is a bearish bet.
Why Tesla is favored as a short by Bears isn’t a mystery. Shares trade for about 58 times estimated 2024 earnings. The S&P 500 tradies for about 18.4 times. Ford trades for about 6.6 times. High valuations, both on an absolute basis and relative to other companies in an industry, are often the starting place for bearish investors.
The short interest for Ford, GM, and Stellantis is about 4%, 2%, and 2%, respectively. Even with the UAW strike, the average short interest is not that high for traditional automaker stocks.