Short Report: Bears bet on pause in short squeeze in Mara Holdings

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 up 1.2%, the Nasdaq Composite was up 3.3%, the Russell 2000 index was down 1.2%, the Russell 2000 Growth ETF (IWO) was down 0.9%, and the Russell 2000 Value ETF (IWN) was down 1.6% in the five-day trading session range through December 5.

SHORT INTEREST GAINERS –

• Ortex-reported short interest on Mara Holdings (MARA) has come off last week’s seven-month lows of 20.7%, rising to 22.6%, though the trend of short covering amid rapid stock price appreciation appears to remain intact. Following the victory of Donald Trump, the perception of a presumably much more crypto-friendly incoming regime has caused investors to look beyond the company levering its bitcoin buying through capital market activity. Indeed, since the Election Day outcome, short positioning as a percentage of free float is down four points while the stock is up 62%, even though shares were off by about 8% in the five-day period covered.
• Our observation of this column last week regarding the bears taking on additional exposure on Archer Aviation (ACHR) following a period of consolidation was validated by the 23% decline in the stock price on Monday on the biggest volume day of the year. That pullback was not sustained, however, with shares gaining over the following four sessions on the way to an overall negative 5.2% finish in the five-day period through Thursday. Also similar to last week, the bearish expression on Archer Aviation continued to climb, with shorts as a percentage of free float rising from 24.4% to 26.1%. Amid the growing debate on whether the momentum in aircraft delivery and air taxi network operation has “left the hangar” with a steep rise in shares since early November, as recent bullish research note from Needham has put it, the stock is now up about 35% year-to-date.
• Ortex-reported short interest on Designer Brands (DBI) had hit a five-month low of 25.7% early last week but has since nudged higher, rising from 26.3% to 28.6% this week to notch a one-month high. Days to cover on the name is also up notably, rising from 3.2 to a two-month high of 4.3, albeit on softer trading volume. The company is set to report Q3 earnings this coming Tuesday, with the last two earnings reports serving as catalysts for sharp pullbacks in the stock price – 20% and 12% following Q1 and Q2 results respectively. Heading into this week’s results, the stock is up 15% in the five day period through Thursday of this week, but remains down 34% year-to-date.
• Estimated short interest on Nikola (NKLA) slipped to its lowest level since late August of around 21% over the prior week, though as the stock continued to tumble, bears have upped their exposure this week. Shorts as a percentage of free float was up from 22.6% to 27.0%, days-to-cover on the name rose from 5.8 to 6.5 despite the more elevated trading volume over the past three weeks, and the stock has fallen another 18% in the five-day period covered. Year-to-date, the cash-strapped zero-emissions truck maker has now lost 94% of its value.

SHORT INTEREST DECLINERS –

• Ortex-reported short interest in CompoSecure (CMPO) is extending its slide while the stock continued to rally this week, sustaining the upward inflection that shares had made from the initial 18% decline in the aftermath of the company’s Q3 results in November. Shorts as a percentage of free float on the stock was down another six points, falling from 41.4% to a three-month low of 35.5%. Shares of CompoSecure, meanwhile, traded up just 0.2% over the five-day period through Thursday, though the stock has now tripled year-to-date and hit a fresh record high intraday in the last session of the period covered.