Digital Turbine enters mid-June caught between two competing narratives: a stock that has more than doubled in a month and a short base that is only now beginning to unwind.
The most striking development is how dramatically short positioning has shifted in recent weeks. Short interest peaked above 13.6 million shares in late May — roughly 12% of the free float — and has since collapsed to around 9.5 million shares, or 8.5% of float. That 30% drop in short shares over four weeks maps almost exactly onto the stock's 123% one-month gain. The unwinding is real, but shorts haven't fled entirely: over the past week alone, SI edged back up nearly 10%, suggesting some bears are rebuilding positions after the initial squeeze. Borrow conditions support that read — cost to borrow has fallen sharply to just 0.53%, down from a spike above 2% in early June, and availability is extremely loose at over 1,000%, meaning new short positions face essentially no friction in the lending market. Options positioning adds a mild note of caution: the put/call ratio at 0.34 is slightly above its 20-day average of 0.31, but the z-score of 0.67 is well within normal range. No panic in either direction.
The Street catalyst for the May squeeze is clear. B of A Securities analyst Omar Dessouky upgraded APPS to Buy on May 27, simultaneously announcing a $7.50 price target — a notable reversal from the Neutral rating he had maintained through the prior year. With the stock now trading at $9.40, it has already moved well through that target inside three weeks. Craig-Hallum's existing Buy rating, with a $7.00 target raised a year ago, is similarly underwater on upside. The consensus is just two Buy ratings and zero Holds, which sounds bullish but is thin coverage — and both targets are now below the current price. The analyst recommendation differential factor ranks in the 98th percentile, reflecting unusually concentrated bullish coverage, but the EPS surprise score of just 11 underscores that fundamental delivery hasn't matched the enthusiasm. Valuation multiples show a PE near 10x and EV/EBITDA around 9.5x, both compressing over the past 30 days as the stock ran, which has eroded the value case that briefly emerged in the selloff.
The earnings history is the most dramatic datapoint in this snapshot. The most recent print on May 26 produced a one-day move of nearly 47% and a five-day move of 88%. A prior event recorded a similar five-day gain of 97%. These are not rounding errors — Digital Turbine has twice in succession delivered near-doubling reactions in the week after results. The next earnings event is scheduled for August 5, which gives the current positioning roughly seven weeks to evolve. With shorts actively rebuilding at the margin and borrow costs near zero, the setup heading toward that date looks materially different from the compressed, high-CTB environment that preceded May's explosion.
Insider activity is a secondary thread worth noting. Every transaction in the past 90 days has been a sale — CEO William Stone, CFO Stephen Lasher, and multiple other officers trimmed positions as the stock climbed from the low $3s through the current $9 range. The aggregate 90-day net is a modest $264,000 in sells, and all trades carry the lowest significance rating, consistent with scheduled liquidations rather than alarm-signal selling. Granahan Investment Management and Dimensional Fund Advisors both added meaningfully to institutional positions in late May, partially offsetting the insider flow.
The peer group offered little shelter this week. FATN fell nearly 10% on the week, BLIN shed 6%, and NOW dropped 5%. APPS's own 4.6% weekly decline looks less severe in that context, though the absolute level remains the central question — what the next print on August 5 actually delivers against a price that has already priced in a dramatic business inflection.
The key tension to watch is whether the short rebuilding of the past week continues toward the stock's prior highs in short interest, or whether the borrow costs stay depressed enough to make that trade feel crowded against a market that clearly caught bears badly offside once already.
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