Short Report: Bearish bets on Groupon at record highs

Welcome to this week’s installment of “The Short Interest Report” – The Fly’s weekly recap of short interest trends among some of the most widely followed high-short-float stocks. Using the data from our partner Ortex.com, which utilizes the latest information from stock lenders to estimate short interest changes for thousands of publicly traded companies, this report will screen for some of biggest changes in short interest as a percentage of free float and days-to-cover ratios while also considering the short interest data on some of the more volatile and heavier-traded names of the week. Based on the availability of data from Ortex, the report tracks the trading period that covers prior Friday through Thursday of this week, excluding holidays. As a basis of comparison for stocks discussed below, the S&P 500 index was down 3.0%, the Nasdaq Composite was down 2.6%, the Russell 2000 index was down 5.9%, the Russell 2000 Growth ETF (IWO) was down 4.6%, and the Russell 2000 Value ETF (IWN) was down 6.3% in the five-day trading session range through December 19.

SHORT INTEREST GAINERS –

• Estimated short interest on Groupon (GRPN) is sustaining its upward trajectory, which has turned steeper since early October. Shorts as a percentage of free float on the name was up from 55.2% to 65.6%, the highest level on record, with days-to-cover also rising from 9.6 to 10.2 as trading volume recedes. Groupon shares had closed the post-earnings November 13th gap lower with sharp gains in the first week of December, though the stock has now been on the back foot for two consecutive weeks, losing 21% from its December 6 high and 13% over the five-day period covered.
• Ortex-reported short interest on Olema Pharmaceuticals (OLMA) spiked to record highs as the stock continues to roll over to multi-month lows. Shorts as a percentage of free float initially headed lower early last week as shares turned south but changed course early this week, rising from 30.3% to 38.8%. Olema had rallied into the company’s announcement of a supply pact with Novartis earlier this month, but has since given up all of those gains. In the five-day period covered, Olema shares were down 14% and have now fallen 57% year-to-date.
• Ortex-reported short interest on Designer Brands (DBI) was up from 31.1% to 34.5% – the highest level since the first week of October, when outsized bearish positioning preceded a 38% peak-to-trough stock price decline. Shares of Designer Brands have since pared about half of those losses, also digesting an earnings miss and guidance cut on December 10, though bears are retrenching in expectation of another leg down in the stock price. In the five-day period covered, the stock was up 3.4%, though shares are still down 37% year-to-date.

SHORT INTEREST DECLINERS –

• Ortex-reported short interest on Kohls (KSS) had peaked at a two-and-a-half month high of 39.6% last week, though with shares extending their decline, bears are also paring their exposure. Short positioning as a percentage of free float on Kohl’s slipped four percentage points to a one-month-low of 34.8% while days to cover declined from 8.6 to 6.9 in the five-day period through Thursday, while the stock fell another 2%. Kohl’s shares are now down 24% from pre-earnings highs on November 25th and also lower by 50% year-to-date.
• Estimated short interest on Frontier Group (ULCC) was down four percentage points to a four-month low of 26.5% and days to cover on the name fell from 6.7 all the way down to 4.9 – a 15-month low. The resilient discount airline has now recovered from stock price plunges driven by disappointing earnings miss in late October and also cautious commentary from UBS in mid-November, prompting more bears to square their positions. Year-to-date, Frontier is higher by 24%, though the stock slipped nearly 1% in the five-day period through Thursday before gaining 5% on Friday.