GitLab, Virgin Galactic remain at forefront of outsized selling as short interest levels in both hit record 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. As a basis of comparison for stocks discussed below, the S&P 500 index was down 3.8%, the Russell 2000 index was down 6.3%, the Russell 1000 Growth ETF (IWF) was down 4.3%, and the Russell 1000 Value ETF (IWD) was down 3.4% in the period range.
SHORT INTEREST GAINERS
- GitLab (GTLB) remains the prime example of short sellers pouncing on the intense selloff that has enveloped both the software space and recent high-growth IPOs. The stock is down another 6.9% in the five-day period covered and has now lost over 55% of its value from its November highs. Meanwhile, the estimated short position on the name has risen to a new record high this Monday at 53%, before ending Thursday up six percentage points for the week at 47.7%.
- We featured Virgin Galactic (SPCE) in this column last week as one of the names with parabolic movements in short interest, and that trend has been sustained this week. With negative sell-side coverage in the wake of the company’s convertible debt offering and IPO lockup expiry reflecting the prevailing sentiment, bears also continued to express their conviction, as estimated short interest jumped another 16% to record-high 44.3% while days-to-cover ratio increased by 57% to 4.2. In the five-day period covered Virgin Galactic was down 9.3% and has now lost over 80% of its value from its late-July high.
- Stoke Therapeutics (STOK) came up on our rising short interest scan in the final week of 2021, when the stock actually corrected its steep declines higher into the year-end, but all of those gains have now been erased amid the prevailing biotech weakness. Estimated short interest and days-to-cover in Stoke nearly doubled this week to 139% and 23.9 levels respectively, while the stock fell another 1.9% in the five-day period covered.
- Estimated short interest in Big 5 Sporting Goods (BGFV) rose six percentage points to about 32% and days-to-cover was up 22% at 2.1 this week. Short position as a percentage of free float has been rising for two consecutive weeks from a three-month low on January 10, while losses in the stock price had accelerated and volumes picked up in spite of Big 5’s positive Q4 earnings pre-announcement last Thursday. In the five-day period covered, the stock is down 13.3%, though shares are bucking the broader market with a 2% rally today.
SHORT INTEREST DECLINERS
- Shares of Cricut (CRCT) are down over 7% in the five-day period covered, down another 5% at the time of writing today, and off by over 50% from their late-June high, and yet the short-sellers appear to be giving up on the name. The estimated short interest in Cricut was down by four percentage points this week to 10.5%, down for the fourth consecutive week, with days to cover also slipping by 36% to 9.2. The company does not report results until early March, and the only high-impact recent news – the resignation of its CFO – actually yielded a positive market response. The short interest decline begs the question, however, whether expectations of thrift and resourceful craftiness are being expressed by reduced bearish appetite amid the tempering in fiscal stimulus and tapering of excess liquidity for consumers.
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GTLB SPCE STOK BGFV CRCT Keywords: Short selling, short interest, days to cover, securities, lending, utilization, GameStop, AMC, GitLab, Virgin Galactic, Cricut, sentiment analysis