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Shorting Cobalt: Short Interest in CIE after 1Q17

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Short interest in CIE stock

As of April 13, 2017, Cobalt International Energy’s (CIE) total shares shorted (or short interest) stood at ~78.5 million, as compared to its average daily volume of ~11.9 million. This means that the short interest ratio in CIE stock is currently ~6.6x, as compared to its 52-week range of 6.1x–13.9x.

The current short interest in CIE stock as a percentage of shares outstanding is on the higher side at ~17.5%, as compared with the other upstream stocks in the SPDR S&P Oil and Gas Exploration & Production ETF (XOP).

Since the start of 2017, short interest in Cobalt International Energy’s stock as a percentage of shares outstanding has risen from ~11.5% to ~17.5%, despite the ~63% fall in its stock price.

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Other upstream players

By comparison, upstream peers California Resources (CRC), Devon Energy (DVN), and Encana (ECA) have short interest as a percentage of shares outstanding of ~29.8%, ~1.7%, and ~1.9%, respectively. Notably, the Direxion Daily Energy Bull 3X ETF (ERX) is a leveraged ETF that invests in domestic companies from the energy sector.

Continue to the next and final part of the series for an analysis of Cobalt’s implied volatility.

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