3 Compelling Stocks to Consider Shorting Now

September 15, 8:00 am

As investors, it’s crucial to examine not only the surging stocks but also those showing potential weaknesses. In today's market, where uncertainty is looming, some investors might find shorting opportunities as a way to capitalize on stock declines. Through the lens of alternative data insights, let's delve into three stocks that may be ripe for shorting.

LightInTheBox: A Dimming Outlook

LightInTheBox, an international online retail company, has seen a surge in its stock price by 40% in the last few days, currently trading at $2.65 per share. However, the underlying metrics raise questions. A persistent decline in social presence, as evidenced by decreasing Twitter and Instagram followers, alongside faltering mobile app downloads, suggests waning consumer engagement. Moreover, employees’ business outlook and satisfaction appear to be declining month over month–a sign of potential internal struggles. The company is also facing waning revenue year over year.
These warning signs suggest that the recent spike in share price may not be sustainable, potentially making LightInTheBox a candidate for shorting.

Lion Electric: The Diminishing Roar

Lion Electric, known for its electric vehicles, has been struggling as its stock price decreased by 1.3%, now at $0.76 per share. The bleak trend is underscored by alternative data that reveals a long-term decline in the company's social media following and job posts, indicative of slowing growth and possibly a strategic pivot. Employee dissatisfaction and a darker business outlook among staff have seen a month-to-month dip, raising red flags about internal morale and performance prospects. With a year-over-year revenue decline, Lion Electric's future looks increasingly uncertain.

ContextLogic: The Vanishing Act

ContextLogic, the parent company of the e-commerce platform Wish, has similarly been faltering, with its stock price down by 1.2%, currently trading at $5.19 per share. A closer look reveals a pattern that mirrors distress; their social media traction is declining across all major platforms, including Twitter, Instagram, and Facebook. This downtrend is paired with a notable drop in mobile app downloads and shrinking web traffic. Indications of a dismal business outlook from employees and a significant year-over-year revenue decrease create a narrative of a company that might be heading towards tougher times. For these reasons, ContextLogic could face further stock price pressure, presenting a potential short sale opportunity.

In conclusion, alternative data provides a unique vantage point, giving investors foresight into potential declines in a company's performance and stock price. LightInTheBox, Lion Electric, and ContextLogic are experiencing tangible signs of operational and engagement troubles, which may not be fully reflected in their stock prices yet. Investors looking for short opportunities might find these situations worth their attention in the current market climate.

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