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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 1.7%, the Nasdaq Composite was up 2.5%, the Russell 2000 index was down 0.1%, the Russell 2000 Growth ETF (IWO) was up 0.4%, and the Russell 2000 Value ETF (IWN) was down 0.7% in the five-day trading session range through September 12.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Kohl's (KSS) has been on an upward trajectory since slipping to a shallow trough around 30% in mid-June. This week however, the build-up in bearish interest has accelerated, rising from 39% to as high as 49% before settling in at about 44% by Thursday. The stock, meanwhile, had settled into a sideways range since the first week of August, though shares had briefly tested their lowest level of the year on Wednesday. Among the department stores, Kohl's has been one of the worst performers this year, falling over 30% year-to-date, and in the five-day period covered through Thursday this week, Kohl's was down about 4%.
• Estimated short interest in Kura Sushi (KRUS) has spent about three months in a very narrow 33%-34% range even as its stock price performance has improved with a roughly 10% gain since mid-July. A bullish initiation of the name from Northcoast coincided with more pronounced 20% gains over the last three trading sessions of the week, yet the bears are not concerned. Short interest as a percentage of free float jumped from 33% to about 37% - the highest level on record, while days-to-cover on the name hit its own record highs of 9.3 – up from 8.7 last Thursday - earlier in the week before the sharp rise in trading volume resulted in a pullback. In the five-day period covered, Kura Sushi was up 22%.
• Ortex-reported short positioning on C3.ai (AI) had spent about three months in a 23%-25% band heading into the company's Q1 results last week. Soft service revenue growth prompted another 18% in losses on the open after the C3.ai reported last Wednesday, but instead of profit-taking, bears are pressing their bets. Short interest as a percentage of free float on C3.ai was up from 25% to about 29% this week – the highest level since the first week of June – even though shares recaptured some of the post-earnings losses with an 8% gain in the five-day period covered. Year-to-date, C3.ai is still down about 20% however.
• Shares of Children's Place (PLCE) were down nearly 80% year-to-date heading into this week's earnings on Wednesday. Unexpected inflection in profitability – driven by a sharp reduction in SG&A spending to the "lowest level in 15 years" inspired by the recent involvement of Mithaq Capital - has seen a steep reversal in its fortunes. The stock has tripled in the three days following the results - including a 28% jump on Friday - and now its losses for 2024 stand at 37%. Bearish positioning is still trending to the upside as it has over the past three weeks however – Ortex data this week saw shorts as a percentage of free float rise from 21.5% to 29.5% - a four-month high.

SHORT INTEREST DECLINERS

• Ortex-reported short interest on Gogo (GOGO) was down sharply late in the week, pulling back from 22.6% to a five-month low of 19%. The reduced exposure may have been premature, however, with Friday's announcement that United Airlines (UAL) signed "the industry's largest agreement with SpaceX to bring Gogo's competitor Starlink to its fleet for onboard connectivity. The stock was already down 8% in the five-day period covered, which may have prompted some profit-taking, though the bears squaring their bets missed out on another 3% of losses in Gogo shares on Friday.