NextDC was 8.35% shorted before its power-delay sell-off; the reported position had been shrinking

When this was written — On 21 October 2026. The figures are as at that date or earlier and have not been updated since.

NextDC was 8.35% shorted on 15 October, 63,429,360 of 759,626,698 shares, in ASIC's daily aggregate report available on 21 October. The position date precedes the 19 October trading halt, but the report was published later under ASIC's T+4 timetable. R1 A year earlier, on 16 October 2025, it was 5.81%. R2 On 21 October, with the halt lifted, the company cut its FY27 net revenue guidance from A$615 to 640 million to A$475 to 500 million, its underlying EBITDA guidance from A$385 to 410 million to A$245 to 265 million, and its capital expenditure guidance from A$5.25 to 5.75 billion to A$4.5 to 5 billion. 13 R16 Capital Brief had the shares down about 40% at $5.51 by 10:08am. 15 The 16 October close, the last before the halt, was $9.18.

Multiplying the 15 October reported position by the move from $9.18 to $5.51 gives about A$233 million. That is an illustrative mark-to-market calculation, not observed profit: the aggregate does not identify entry prices, subsequent trades, borrowing costs or offsetting hedges. Nor does it reveal what traders knew about the power delay.

What broke

NEXTDC attributes the guidance revision primarily to delayed electricity network works, rather than a reduction in contracted demand. Jemena, the electricity distributor, suspended parts of the 66kV network augmentation needed for the next increase in grid supply to the M3 campus in Melbourne's inner west in September, citing community and stakeholder opposition, safety concerns, a lack of site access and the absence of local council consent while consultation continues; it does not expect to restart before February 2027, and NextDC now expects the next supply increase in FY28. 14 R16 The August guidance had included about A$140 million of each of net revenue and underlying EBITDA from the affected M3 contracts; those have been taken out, and the company warned that service-level credits payable on them "could reduce Underlying EBITDA below the revised guidance." R16 13 Some of the contracts give the customer termination rights. 14 The Victorian planning decision on M3 stages 6 and 7 is now expected after the 28 November state election. 15

The response is a pause. Projects not backed by customer contracts and land acquisitions are on hold, the capex program is under review, and the board will evaluate "capital recycling opportunities, including the potential sale of selected development sites," with the outcome due by the annual general meeting on 20 November. R16 Liquidity at 30 September was A$8,675 million: A$1,275 million of cash, A$6,700 million of undrawn senior debt and A$700 million of delayed-draw hybrid commitments, with the caveat that drawing the senior debt depends on billing milestones the M3 delay affects. 14 R16 The company says it was within its financial covenants at 30 June and expects to be at the next test date, 31 December. R16 Citi's Siraj Ahmed: "Earnings impact much higher than expected." 15

The position was shrinking into it

The chart shows the aggregate position, not whether any individual trader anticipated a power delay. The position rose through the year, from 5.81% last October to a run of readings above 9% from March, as the stock fell from $16.43 on 21 October 2025 to $12 to $13 by the autumn. Two capital-market events are important context when interpreting that number.

The first was the equity raising. On 20 April NextDC launched a 1-for-5.4 accelerated non-renounceable entitlement offer at A$12.70 a share to raise about A$1.5 billion, an 8.6% discount to the A$13.90 theoretical ex-rights price, alongside a hybrid securities offer upsized by A$0.7 billion, after a 250MW contract win at S4 Sydney. R12 On 28 April the position was 9.32% of 640.9 million shares; on 29 April it was 8.40% of 721.7 million, with the shares short rising by 0.9 million. R7 R8 The larger denominator explains the percentage decline even though reported shares short increased; it does not establish that individual traders left their positions unchanged. Six directors took up entitlements at $12.70 on 18 May, chair Douglas Flynn's 23,712 shares the largest. 22

The second was the convertible. On 9 September the position was 8.05%, 61.2 million shares. R3 On 10 September NextDC priced A$1.1 billion of 1.75% subordinated convertible notes due 2031, convertible at A$16.695, a 32.5% premium to a reference price of A$12.60 set by a delta placement of about 18.6 million existing shares "to facilitate hedging by investors in the Convertible Notes"; no new shares were issued and the company received nothing from it. R10 The 10 September report had the position at 9.43%, 71.6 million shares, and 11 September at 9.56%, 72.6 million, the twelve-month high: 11.5 million shares added in two days, a little under two thirds of the delta placement. R4 R5 Convertible investors may hedge by selling borrowed stock. The timing is consistent with hedging activity, but the aggregate report cannot attribute the increase to those investors.

Then it unwound almost as fast. The position was 8.64% on 18 September, the day 21.9 million shares traded, about four times the average of the week before, ahead of the S&P/ASX 50 rebalance that took NextDC into the index from 21 September, and 8.38% on that Monday. R6 R9 20 From there it drifted: 8.69% on 6 October, 8.63% on 13 October, 8.52% on 14 October, 8.35% on 15 October. R1 Over the four weeks to 15 October the position fell 0.61 percentage points, while the close fell from $11.06 to $8.86. Reported shares short declined while the price fell. Profit-taking is one possible explanation, but the aggregate cannot distinguish it from hedge adjustments or other position changes.

Funding, valuation and the order book

Funding and valuation are possible considerations, not motives established by ASIC's data. The company's own numbers show the scale of both its contracted demand and its capital requirements. FY26 net revenue was A$405.0 million, up 16%, underlying EBITDA A$248.8 million, and the statutory profit of A$82.1 million followed a A$60.5 million loss. Contracted utilisation tripled to 740.1MW pro forma against 175.0MW billing and 287.9MW built, for a forward order book of 565.1MW, "more than 3.2 times billing utilisation"; capex was A$3,397 million against guidance of A$2,700 to 3,000 million, and the company said it had raised A$9.75 billion of new capital since August 2025. R11 On Shorted's fundamentals record free cash flow for the year was a A$2.0 billion outflow and net debt A$2.4 billion at 30 June; at the 16 October close the shares traded on 75 times earnings.

The order book is the long case: 565MW of binding contracts not yet billing. The capex is the short case: the capacity has to be built and powered before it bills, and FY26 capital expenditure exceeded the cited guidance range. M3 is where the two meet. The FY26 release listed 165MW in progress at M3 Melbourne, R11 and the guidance cut is what it costs when the power for that capacity arrives a year late. It is also why the market read the number as worse than A$140 million: the contracts are deferred, not lost, but the credits, the termination rights and the covenant arithmetic all run on billing dates.

The sector was already selling. Kalkine reports the Firmus AI data-centre float was withdrawn this month on weak demand and concerns about its debt and valuation, 19 and that a US-listed AI cloud provider's debt load, a hotter-than-expected US inflation reading and a forecast that many independent AI cloud providers may not survive as standalone businesses had pushed data-centre stocks to new lows in the week before the halt. 18 NextDC's close went from $12.79 on 9 September to $9.18 on 16 October, down 28%, before the halt requested on 19 October. 21

What ASIC's next reports will show

The 16, 19 and 20 October positions, due in the next three reports, cover two days in which the stock did not trade; they will show the net change in reported positions around the halt, not every purchase or individual trader's activity. The 21 October report is the one that matters: a position of 63 million shares against a day's volume that will be some multiple of the 15-day average, at a price 40% lower. Days to cover were 15.4 on the volume before the halt; the ratio may fall if average trading volume rises, depending also on the reported position.

Among software and services names NextDC was the second most shorted at 8.35%, behind WiseTech at 11.08% and ahead of SiteMinder at 8.20%, on a day the sector's other crowded short was rallying with a crowded short position. On Shorted's crowded-short breakout screen it was a setup, 27th of 1,310, before the halt; the subsequent gap down means that pre-halt ranking is stale and must be recalculated.

ASIC's aggregate records positions, not reasons. A convertible hedge, an index arbitrage and a bear on capex all appear in it as the same number, and the public aggregate cannot assign the observed position to those categories. The position that met the Jemena announcement was smaller than it had been at any point since early September. The NXT page will carry the 21 October print on 27 October.

Disclosure analysis, not a recommendation to buy or sell.