Short Report: Bears look to Cinemark, Dave & Busters to reflect growth scare

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 2.1%, the Nasdaq Composite was down 2.6%, the Russell 2000 index was down 3.4%, the Russell 2000 Growth ETF (IWO) was down 3.7%, and the Russell 2000 Value ETF (IWN) was down 3.0% in the five-day trading session range through March 6.

SHORT INTEREST GAINERS

• Following six weeks of sideways track, Ortex-reported short interest on Dave & Busters (PLAY) has seen its upward slope steepen over the past week, with shorts as a percentage of free float rising from 23.8% to 25.6% – the highest level in about two months – and days-to-cover on the name is up 50 basis points to 6.2. The entertainment venue chain has yet to report Q4 results, but investors are less upbeat on discretionary consumer spending and less patient with the company’s turnaround efforts. This week, the stock is down about 8% and year-to-date shares are off by 34%. The stock has also about two thirds of its value relative to its peak in April of 2024.
• Estimated short interest on Cinemark (CNK) had fallen to its lowest level in about five months last week at 21% as bears were quick to take profit on the stock’s post-earnings swoon. Shares have continued falling this week however as investors turned more cautious on the broader economic slowdown impacting consumer, which is driving some renewed short positioning. Shorts as a percentage of free float on Cinemark rose from 21% to as high as 25% before settling at 22% to end the week. The stock, meanwhile, has fallen 7.5% in the five-day-period covered and has now declined 28% from its pre-earnings two-month highs on February 18.
• Ortex-reported short interest on CompoSecure (CMPO) is on the rise as bears pile on to more pronounced selling pressure. Shorts as a percentage of free float on the stock was up from 17.6% to 20.1% as shorts front-ran the company’s Q4 earnings miss after Wednesday close when shares fell 4%. Days-to-cover on the name was also up 60bps to 10.8 despite the pickup in trading volume around the earnings release. In the five-day period covered, CompoSecure shares were down 25% in the five-day period covered, falling to its lowest level in about seven months.

SHORT INTEREST DECLINERS

• Shares of Virgin Galactic (SPCE) had made new multi-year lows this week below $3.50, sliding 12% in the five-day period covered, as investors were hardly enthused by the company’s Q4 earnings update during the prior week. Virgin Galactic continues to expect its new Delta SpaceShips service to launch in the summer 2026, but the company continues burning through cash and operating with minimal revenue. Short positioning on the name has been reduced however as bears book their profits, with short interest as a percentage of free float on the name down from 37% to 30%, even though a cutback on trading volume has seen the stock’s day-to-cover rise from 11.5 to 12.0.
• Ortex-reported short interest on Grindr (GRND) hit an all-time high of 55% early last week but has come in this week, falling sharply from 47% as of last Thursday to 23% this Thursday – a level that is more on par with its trends last year in the low-20%. Bears are paring their exposure after the stock saw some steep selling following FY24 earnings. Grindr is off by 19% from pre-earnings levels and also down 13% in the five-day period covered through Thursday.