Shorting Ford (F) in 2025: A High-Stakes Bearish Play Amid Mixed Fundamentals and Market Risks

In the volatile landscape of 2025, Ford Motor Company (F) presents a complex case for bearish investors. While the automaker reported record Q3 2025 revenue of $50.5 billion-surpassing analyst forecasts of $42.26 billion and outperforming General Motors (GM) for the 26th time since 2016-a blockchain news analysis noted that this performance was driven by strong demand in commercial vehicles. Its fundamentals reveal a mixed bag of opportunities and risks. This analysis evaluates whether shorting Ford is a viable strategy, the mechanics and costs involved, and alternative approaches like selling naked puts, while contextualizing broader market dynamics through Applied Digital's (APLD) short squeeze example.

Ford's Fundamentals: Strengths and Weaknesses

Ford's Q3 2025 performance highlights both resilience and vulnerability. The company's adjusted EBIT reached $2.6 billion, driven by strong performance in its Ford Pro segment, which generated $17.4 billion in revenue and $2 billion in EBIT, according to a Yahoo Finance earnings call summary. However, its electric vehicle (EV) division, Ford Model E, reported a year-to-date loss of $3.6 billion, attributed to lower net pricing and increased R&D spending, according to the same Yahoo Finance summary. This duality underscores the challenges of transitioning to electrification while maintaining profitability in traditional segments.

Operational headwinds further complicate Ford's outlook. The Novellas fire and ongoing tariffs are projected to reduce 2025 earnings by $1 billion, as noted in the Yahoo Finance summary, while the company revised its adjusted free cash flow guidance downward to $2–$3 billion. Despite plans to recover lost production by adding a third shift at its Dearborn plant, these setbacks raise questions about Ford's ability to sustain its recent momentum.

Risks of Shorting Ford: Unlimited Losses and Dividend Costs

Short selling Ford carries inherent risks. If the stock price rises instead of falls, losses can escalate theoretically without limit. For instance, Ford's share price has historically been volatile, and its recent 73.6% decline from a peak of $39.60 to $10.44-a figure cited in a Forward Industries analysis-illustrates the potential for sharp price swings.

Short sellers also face dividend costs. While Ford's current dividend yield is not explicitly stated in the data, short sellers must reimburse lenders for dividends paid to shareholders. This adds a recurring cost to the strategy, particularly if Ford maintains or increases its dividend payouts-a common practice for mature automakers.

Alternatives to Short Selling: Selling Naked Puts

A less risky alternative for bearish investors is selling naked puts. This strategy involves collecting premium income by agreeing to purchase Ford shares at a specified strike price if the stock falls below it. However, it requires margin approval and exposes the seller to the obligation of buying shares at a predetermined price, even if the stock plummets further. For example, if Ford's stock drops below the strike price, the seller must purchase shares at a loss, potentially offsetting the premium received.

Applied Digital's Short Squeeze: A Cautionary Tale

The case of Applied Digital (APLD) offers a vivid illustration of short squeeze dynamics. With 27% of its float sold short, a Trading News forecast noted that a rapid price increase could force short sellers to scramble to cover their positions, amplifying upward momentum. This scenario highlights the risks of high short interest in speculative stocks. While Ford's short interest percentage is not disclosed, the APLD example underscores how market sentiment and liquidity can create self-reinforcing price movements, even in fundamentally sound companies.

Conclusion: Weighing the Stakes

Ford's fundamentals present a nuanced case for bearish investors. While its commercial vehicle segment and operational efficiency offer stability, the EV division's losses and external headwinds create vulnerabilities. Shorting Ford, however, exposes investors to unlimited losses and dividend costs, making it a high-risk proposition. Selling naked puts could mitigate some risks but introduces new obligations. The APLD short squeeze example serves as a reminder that market dynamics can override fundamentals in speculative environments.

For investors considering a bearish stance, a diversified approach-combining short positions with hedging strategies or alternative bearish instruments-may better align with the uncertainties of 2025's market.