OPTU faces one of its sharpest positioning shifts of the year — short interest climbing fast, borrowing costs surging, and analysts cutting targets even as the stock has rallied 60% over the past month.
The short-side buildup is the clearest story this week. Short interest as a percentage of free float hit 13.6%, up nearly 20% on the week and 26% over the past month — a relentless and accelerating rebuild. The jump is particularly stark around June 8-9, when shorts added roughly 6 million shares in a single session, pushing the position to its highest level in the 30-day window. FINRA's fortnightly official figure put short shares at 37 million with a days-to-cover of 8.1, reinforcing how substantial the committed short position has become relative to normal trading volume.
The borrowing market tells a complementary story of escalating demand. Cost to borrow has jumped ninefold since late May — from around 0.44% to 3.81% — with the sharpest leg of that move coming in the past five days alone, a 260% weekly increase. That kind of acceleration in borrow cost typically reflects either a rapid expansion in new short positions or tightening in the pool of available shares. Availability, at 232% of short interest, remains in a range that lenders would classify as tight-to-normal rather than loose — it dropped sharply from above 850% in late May, meaning the lending pool has been substantially consumed as new shorts came on. The put/call ratio at 1.08 is modestly above its 20-day mean but only half a standard deviation out, so options positioning is mildly cautious rather than alarmed — the real hedging activity is happening in the lending market, not derivatives.
The Street's view has been consistently downbeat, and recently more so. Citigroup's Michael Rollins downgraded OPTU to Sell from Neutral in mid-May, cutting his target from $1.50 to $0.50 — a 67% reduction that stands as the most aggressive bearish call in the recent analyst cluster. UBS and Barclays both trimmed targets to $1.00, maintaining neutral ratings. The consensus sits at Hold with a mean target of $1.19 — fractionally below the current price of $1.29 — leaving the stock with effectively no implied Street upside. The EV/EBITDA multiple of 8.3x has barely moved over the past month. The ORTEX short score of 66.2, while easing slightly from a peak of 66.9 earlier this week, remains elevated and ranks in just the 8th percentile of the universe on short score — meaning OPTU is in the top decile of shorts-under-pressure names.
Institutional ownership adds a layer of complexity. Founder Patrick Drahi holds 22.8% of shares outstanding but filed a reduction of 80 million shares in a recent disclosure — a massive trim from a controlling shareholder that the institutional table doesn't fully explain. Milfam LLC added 7.15 million shares as recently as June 5, and several other smaller funds — Hudson Bay, Vanguard-affiliated vehicles, JPMorgan — have been building positions. The picture is bifurcated: the founder stepping back while a cluster of hedge funds and asset managers step in. Insider activity at the operating level has been uniformly selling — the General Counsel has sold 20,000 shares at the start of each of the past three months like clockwork, and the CEO and CFO both sold into the February stock strength.
Prior earnings prints have delivered violent moves. May's Q1 report knocked 18% off the stock in a single day and 36% over the following week. The most recent event on June 10 saw a 13.6% single-day recovery — suggesting the market can swing hard in either direction on catalysts. The next scheduled earnings event is August 6. Between now and then, the key variables to watch are whether the borrow cost acceleration continues toward a level that makes new short positions economically painful, whether the gap between the $0.50 bear target and $1.29 price narrows on any operational update, and whether Drahi's stake reduction prompts further disclosure.
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