Short-selling of Vestas Wind Systems A/S increased to the highest level on record on speculation the biggest wind-turbine maker may not reach its 2011 orders goal.
Short positions in Vestas rose to 17.2 percent as of Dec. 26, the most in more than five years, according to figures on Bloomberg compiled by Data Explorers Inc. Short sellers borrow stocks and sell them in the anticipation of profiting by repurchasing the securities later at a lower price.
The company, based in Aarhus, Denmark, on Oct. 30 cut its forecasts for margins and revenue, while retaining guidance that orders this year will reach 7,000 to 8,000 megawatts. UBS AG, Switzerland’s largest bank, said in a Dec. 19 note that there’s a “high risk” Vestas won’t meet its orders target.
“Negative expectations around Vestas have increased to reflect the view that the company will not achieve their order guidance of 2011,” said Rupesh Madlani, an analyst in London at Barclays Capital who rates the stock “equalweight/positive.”
Vestas still expects to meet the target, Peter Kruse, a company spokesman, said by phone, declining to comment on short-sales. Vestas has lost two-thirds of its market value this year as competition from Asian manufacturers pushed down turbine prices and European governments cut investment in renewables.
“Macro developments, principally reduced availability of bank funding for infrastructure projects, will continue to present downside risk for the company,” Madlani said.
Short-selling reached 17 percent for the first time on Dec. 23, exceeding the May 16 figure of 16.7 percent, the previous maximum in a series that goes back to July 2006. Vestas today fell 0.1 percent to 59 kroner by the close in Copenhagen.