Short sellers circling PEXA as it loses $1 fee stoush
Analysts and investors are concerned PEXA’s core business earnings could become “significantly worse” as risks compound.
PEXA’s stock is under attack by short sellers as the dominant electronic conveyancer faces tightening regulatory pressure on its earnings.
In the two days after a NSW pricing regulator spooked markets with a proposed tightening of its pricing cap on 31 March, the proportion of PEXA shares in a short position lifted from about 3.2% to 4.3%, the highest in three years. PEXA has also lost a bid to pass on a $1 transaction fee in its largest state market.
Ten Cap Investment Management founder and lead portfolio manager Jun Bei Liu, who has held a short position in the company since its half-year result, said PEXA would “absolutely” be worried about its profit margins.
PEXA’s stock is down about 23% since New South Wales pricing regulator IPART announced its intention to tighten pricing regulation for electronic conveyancers in a similar way to traditional infrastructure utilities like electricity and water.
