NFLX enters its final two weeks before Q3 earnings with the most notable development sitting not in the options market or on the Street, but in a sharp and sudden rebuild of short positions over the past month.
Short interest is the standout this week — but not because the level is high. At roughly 0.03% of the free float, it remains inconsequentially small. What is striking is the pace of the rebuild. Short interest has tripled over the past month, up more than 200%, and climbed 56% in the past week alone. The absolute share count jumped 70% in a single session on June 29. That kind of acceleration, from a very low base, usually signals new positioning rather than covering activity in reverse. It is worth watching whether this is TSX-listing-specific noise or a genuine directional bet building ahead of the July 16 print.
The borrow market is not flashing distress. Cost to borrow runs near 6.5%, easing about 16% on the week from a mid-June peak above 7.8%. That is a modest and stable rate — nothing that suggests a squeeze setup or a battle for hard-to-find shares. The lending pool is functioning normally. The ORTEX short score sits at 29.2, essentially flat over the past ten sessions and well inside the lower half of the historical range. That composite reading does not corroborate the urgency implied by the raw share-count jump. The two signals point in different directions, which is itself worth noting.
The broader fundamental picture has improved since the prior note in this series. Netflix delivered stronger-than-expected Q2 subscriber growth, adding 5.8 million net new members and raising full-year guidance. The ORTEX stock score has retreated from its mid-May high near 77 to around 74, with the momentum pillar bearing most of the pressure. Growth and quality remain the firm anchors — forward EPS estimates show over 120% year-on-year increase, and the 90-day EPS momentum factor ranks in the 80th percentile. Value remains the persistent weak point, with price-to-free-cash-flow and price-to-book multiples well above sector norms. The previous note in this series flagged a Street consensus price target of $114 against a US-listed share price then near $77 — a gap that implies the analyst community still sees meaningful recovery potential even after the April drawdown.
The institutional holder list is thin in this snapshot — nine entries, topped by co-founder Wilmot Hastings with just over 0.5% of shares. The more notable move is Temasek Holdings, which added 1.37 million shares in Q1 to bring its position to roughly 2.1 million — a meaningful addition from a sovereign wealth fund that tends to move deliberately.
Earnings on July 16 are now sixteen days away. The recent history of post-earnings moves is instructive: the April 17 print triggered an 11.6% decline the following day and a 14.3% drop over the subsequent five sessions. An earlier April event produced a nearly identical reaction. The pattern from recent quarters is asymmetric — the stock has absorbed larger moves to the downside than to the upside after results. With Q2 subscriber numbers already known to be strong, the July 16 print will likely pivot on margin guidance, advertising revenue progress, and whether the raised full-year outlook holds. Whether the accelerating short interest rebuild over the past month reflects pre-earnings hedging or fresh conviction will become clearer once the report lands.
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