Short Report: SunPower short-squeeze continues for fourth week

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 2.3%, the Nasdaq Composite was up 2.6%, the Russell 2000 index was down 0.4%, the Russell 2000 Growth ETF (IWO) was down 0.1%, and the Russell 2000 Value ETF (IWN) was down 0.4% in the five-day trading session range through June 6.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Frontier Group (ULCC) had tracked sideways just below 20% since mid-April, though with the stock testing a four-month low in the wake of a Raymond James downgrade last week, bears are betting that the downward trend will continue. Shorts as a percentage of free float rose from 20% to about 23% this week – a two-month high. Days to cover on the name was also up 25bps to 9.15 – a record high. Frontier Group shares meanwhile were up 3.6% from last week’s lows, though the stock is down 35% from the highs in March and flat year-to-date.
• Estimated short interest in Applied Digital (APLD) reached its highest level for the year at 28% in the first week of May, with selling pressure building following a disappointing Q3 result in the prior month that reflected the company experiencing outages in its datacenter hosting business. The balance of last month had seen some short covering as the stock staged a rebound, though this week, bears turned course, increasing their exposure as short interest rose two percentage points to about 24%. The stock, however, extended its bounce, rising 17% in the five-day period covered.
• Ortex reported short interest in Abacus Life (ABL) has turned more volatile in the past two months, reaching 2024 highs of about 30% in the first week of April and slipping back down to 16% for much of May before rising about eight percentage points to 25% this week. Trading in the shares of the life insurance policy manager has also been more active, with the stock reacting positively to the announcement of a distribution agreement with AIMCOR on Monday but selling off for the rest of the week. In the five-day period covered through Thursday, Abacus Life ended up 6.6%.
• Estimated short interest in Guess (GES) has resumed its steady rise in May, increasing consistently over the past five weeks while the stock price has come under pressure. Shorts as a percentage of free float were up from 32.4% to 35.2% – breaching the 35% level for the first time this year. The stock has also long-closed its 20% gap higher following its last earnings report in March, turned in one of the worst one-month runs in Apparel over the past month with a 13% decline, though in the five-day period covered, Guess shares traded flat.

SHORT INTEREST DECLINERS

• Ortex-reported short interest in SunPower (SPWR) had risen as high as 94% by the second week of May, though the bearish positioning as a percentage of free float has been on the decline for four consecutive weeks since then, and this week, short covering has accelerated, slipping from 85.3% to 68.5% – the lowest level since mid-March. While the company has announced lay-offs for a quarter of its staff just in April and deferred reporting its quarterly results in May, the rise of the meme-stock tide has lifted the SunPower boat, producing what Wolfe Research called in its May 15 research note downgrading the name a “massive” short squeeze. The stock was up just 2% in the five-day period covered through Thursday, though SunPower shares are still up 50% from the start of the meme-stock party on May 13.