TXG Shorts Rebuild as CEO Sells Into the Rally

10x Genomics closed June with its stock up 20% on the week and 35% on the month — yet the short base expanded sharply into that rally, the CEO sold stock three times in eight days, and options turned their most bullish in over a year, creating one of the more charged setups in the life-science tools space heading into Q2 results.

The short picture has deteriorated fast. Short interest climbed to 18.5% of free float — up 25% in a single week — a move that is particularly striking given the stock's simultaneous surge to $38.34. That kind of divergence, where shorts add aggressively into a strong price rally, points to real conviction on the bear side rather than a mechanical squeeze unwind. The FINRA fortnightly count corroborates: 22.1 million shares short with 6.8 days to cover. The borrow market, however, shows no distress. Availability is ample at 643%, and cost to borrow remains negligible at 0.43% — meaning new short positions are cheap and easy to establish, which explains why bears are leaning in rather than retreating.

Options positioning flipped sharply in the opposite direction. The put/call ratio collapsed to 0.19 on June 30, roughly three standard deviations below its 20-day average of 0.28 — the most aggressively bullish reading on the options market in at least a year. That extreme call-side skew stands in direct contrast to the short rebuild. The two signals are not easily reconciled: options traders are chasing upside, while short sellers are betting the rally overshoots. Something has to give before the August 7 earnings date.

Piper Sandler added fuel on July 1, with analyst David Westenberg more than doubling his price target from $20 to $42 while maintaining Neutral — an unusual move that essentially tells the story of the week: the stock has run past where even recent bulls expected it. Barclays, which raised to $40 last week, now finds itself at roughly the same level as the current price. That means the consensus mean of $27.60 is now materially stale as a guide — the stock has traded through most of the Street's numbers. The bull case rests on consumables volume recovery and a projected 5-19x per-platform expansion by 2027. The bear case, unchanged, is the 2024 revenue contraction and a valuation that has moved aggressively: price-to-book expanded more than 30 points over the past month alongside the rally, and EV/EBITDA remains deeply negative. Peers CRL and TECH both gained more than 20% on the week, suggesting some sector-wide tailwind underneath TXG's move — ILMN and PACB gained around 7% and 28% respectively, making TXG's 20% week look less exceptional in context.

Insider activity is the clearest cautionary note. CEO Serge Saxonov sold shares across four separate transactions on June 22, collecting roughly $1.03 million at prices between $33 and $36. That followed another CEO sale on May 26 and coordinated selling by co-founder and Chief Scientific Officer Ben Hindson and CFO Adam Taich on May 22. Net insider activity over the past 90 days amounts to a net sell of just over $2.8 million in value — consistent, methodical liquidation at every meaningful price level the stock has hit during its recovery. At $38.34, Saxonov's June 22 sales are already underwater on a mark-to-market basis, but the pattern of selling into strength, rather than waiting, sets a tone.

The ORTEX short score ticked up to 62.3, its highest reading of the past two weeks, reflecting the pickup in short interest as a share of float even as EPS momentum at 30 days holds near the 95th percentile. The next scheduled catalyst is Q2 earnings on August 7 — a print where history offers a consistent pattern: the last two releases each produced next-day losses of 3-5% and five-day losses of 5-10%. With the stock 35% higher than a month ago, the bar for a clean outcome has risen considerably, and the divergence between call-side enthusiasm and short-side conviction will almost certainly resolve around that date.