Short Report: Groupon shorts at two-year 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 0.5%, the Nasdaq Composite was up 0.2%, the Russell 2000 index was down 2.7%, the Russell 2000 Growth ETF (IWO) was down 2.8%, and the Russell 2000 Value ETF (IWN) down 3.3% in the five-day trading session range through October 24.

SHORT INTEREST GAINERS

• Estimated short interest on Groupon (GRPN) has been rising in spurts for much of the second half of the year, with exchange-reported data up in eight out of nine semi-monthly periods. This week too, bearish positioning as reported by Ortex saw another bounce from 41.6% to 44.8% – the highest level since late 2022. Shorts are piling on with bets that the 20% year-to-date decline has the momentum to continue, even though a recent report from Roth MKM argued that the resolved tech issues and efforts in monetizing its stake in SumUp make Groupon “oversold”. The stock was down 8.5% in the five-day period covered through Thursday.
• Ortex-reported short interest on Cinemark (CNK) jumped from 20.9% to 23.8% and has now risen about five percentage points in the span of three weeks. The stock has had an impressive 2024, doubling in price this year, as investors bet that the industry has finally healed from the pandemic shutdowns and Hollywood strikes – just this week, a letter from Third Point argued that Cinemark is “poised for underappreciated growth over the next few years as the supply of theatrical releases rebounds from pandemic- and strike-related headwinds”, but shorts are willing to fade some of the optimism heading into Thursday’s earnings. This week, the stock was down 2.5%.
• Ortex-reported short interest on Kura Sushi (KRUS) had fallen to a six-month low of 30.5% last week, but this week’s stock price bounce is being met with increased tension from the bear camp. Shorts as a percentage of free float were up from 30.6% to 33.8% while days-to-cover spiked from 11.5 to 13.9 – the highest level since 2020. Kura Sushi had risen just over 7% in the five-day period covered, with the bulk of the gains coming on Tuesday following a price target raise at Barclays discussing the company’s stabilizing comps. The stock has also nearly doubled since early August lows, though year-to-date, Kura Sushi shares are up 24%.
• Estimated short interest on Gogo (GOGO) had slipped to five-month lows of 19% in mid-September but has since worked itself off the low and this week, short positioning was up a much more pronounced five percentage points to about 25%. The stock, meanwhile, was down 20% from the start of September and through the first week of October on relatively higher volume, punctuated by United Airlines having announced its Starlink deal with SpaceX mid-month, though shares have turned more resilient this month, with a rebound of about 20% from the lows. In the five-day period covered this week, Gogo is down just 2%, though year-to-date, the stock is still down 29%.

SHORT INTEREST DECLINERS

• Ortex-reported short interest on Guess (GES) had tracked in a five-point band of 30%-35% since early July, though with the stock now down nearly 30% from mid-July highs, bears are more willing to book some profits. This week, shorts as a percentage of free float declined sharply, falling from 35.5% to 25.3% – a six-month low – while the stock fell 10% in the five-day period through Thursday, with another 2% of declines registered on Friday. Guess shares are also down 24% year-to-date, though its 33% decline over the past six months make the stock one of the worst performers in the Apparel sector.