Short Report: Bearish positioning in Madrigal Pharmaceuticals at 3-month high

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 1.6%, the Nasdaq Composite was down 2.2%, the Russell 2000 index was down 3.2%, the Russell 2000 Growth ETF (IWO) was down 3.6%, and the Russell 2000 Value ETF (IWN) was down 3.0% in the four-day trading session range through September 5.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Madrigal Pharmaceuticals (MDGL) had slipped to a four-month low of 25.8% in mid-August as bears took profits following the stock’s near-20% pullback over the first half of the month after earnings and amid the overall market softness. While the bounce-back in Madrigal shares has been shallow however, shorts are refreshing their bets. This week, short interest as a percentage of free float rose from 30.9% to 37.6% – the highest level since early June. Days to cover on the name is also on the rise, increasing from 5.7 to a record-high level of 8.4. The stock was down 1% in the four-day period covered, though year-to-date, Madrigal shares are up about 5%.
• Last month, we discussed Savers Value Village (SVV) bearish positioning having opportunely risen to a one-month high above 32% ahead of an earnings disappointment on August 8th that prompted a near-10% retreat in the stock price. Shorts had reduced their exposure for the balance of the month to as low as 26%, but this week, with broader market pullback gaining steam, bearish bets on this second-hand retail name is also resurfacing. Ortex data saw the shorts as a percentage of free float in Savers Value Village rise from 26.7% to 29.5% and days to cover go up from 11.2 to 12.4 – a two-month high. The stock meanwhile has slipped 4.4% in the four-day period covered and has now lost nearly 50% of its value year-to-date.
• Estimated short interest on Telesat (TSAT) troughed around 18% late last week, marking its low level for the year, before recovering to about 26% this week – a three-week high. Likewise, the day-to-cover ratio ranging over three months saw multi-week lows in mid-August but bounced to 6.0 from 4.6 this week – a one-year high. Shares of Telesat are up about 7% in the four-day period covered, though its Q2 report mid-month also helped the company to a 41% gain in August. The stock is up just about 3% year-to-date.
• Ortex-reported short interest on Skillz (SKLZ) spiked early in the week and then maintained its altitude, jumping from 25.7% to 35.6% – a record hike. Days to cover on the name also continued trending to the upside, rising from 24.9 to its own record high of 26.9. The mobile gaming platform operator meanwhile has continued tracking to the downside, with losses in the stock accelerating since the company’s early August Q2 results and thus far into September. Skillz shares were down about 5% in the four-day period covered through Thursday and have now fallen 11% year-to-date.

SHORT INTEREST DECLINERS

• Estimated short interest on Upstart Holdings (UPST) had come off the sub-29% low seen in early August, though with the stock staging a broad 63% rally over the prior month in the wake of a strong Q2 earnings report on August 6th, bears are still leery to press their bets. This week, Ortex data saw short positioning as a percentage of free float come in from 30.2% to 29.4% – within a point of this year’s lows. The stock meanwhile has caved 15% in the four-day period covered, with another 4% in losses seen on Friday, and has now lost about 16% year-to-date.