RDDT closes out June with short sellers at their most aggressive positioning in months — and Q2 earnings now less than four weeks away.
The short interest story has moved decisively since last week's note. Bearish positioning jumped nearly 20% over the past week, bringing short interest to 12.7% of the free float — up from around 10.7% seven days ago, and up more than 15% on the month. That is a meaningful acceleration. The week-on-week move is the sharpest in the 30-day window, with the bulk of the build arriving in a single step between June 23 and June 24, when short shares climbed from roughly 14.8 million to nearly 17.5 million. Bears are no longer edging back — they are leaning in.
What keeps this from looking like a classic squeeze setup is the lending market, which remains unambiguously loose despite the repositioning. Borrow availability has actually tightened over the week — dropping from around 580% to 509% — but at 509%, there are still roughly five shares available for every one already on loan. The 52-week minimum availability is 440%, so the pool is not close to stressed. Cost to borrow nudged up 15% on the week to 0.54%, but that remains trivially cheap. Shorts face no meaningful friction entering or holding positions, and there is no squeeze pressure in the lending market to flag.
Options positioning is mildly cautious but not alarmed. The put/call ratio at 0.79 is just half a standard deviation above its 20-day average — barely a signal. The ratio has been drifting lower from its late-June peak above 0.81, suggesting any hedging impulse from earlier in the week faded. The short-score reading of 56.2 has climbed about six points since mid-June, tracking the SI build, but remains in moderate rather than extreme territory. Taken together, the positioning picture is one of bears rebuilding with purpose while options traders watch rather than act.
The Street remains broadly constructive despite the bearish repositioning. The analyst consensus is a buy, with Needham reiterating its $300 target as recently as June 24 — the most current action on the ticker. Most analysts raised targets following April's Q1 print, where the stock moved 12.7% higher on the day. The bull case rests on Reddit's differentiated community model, beat-and-raise execution, and expanding monetization. Bears worry about expiring data licensing agreements, Google dependency, and a potential deceleration in user growth. The EPS momentum factor scores remain high — ranking in the 87th percentile on 30-day EPS momentum — but the forward earnings growth rank is weak at the 22nd percentile, a tension that the July 30 Q2 report will need to resolve.
Insider activity adds a cautionary data point. COO Jennifer Wong sold approximately $6.9 million in shares on June 16 across multiple tranches, all priced between $175 and $182. CEO Steve Huffman sold a smaller amount — around $892,000 — the day prior. Both trades carried low significance scores and are likely scheduled plan sales rather than discretionary signals. Still, the net 90-day insider position is a net sell of around $15.7 million in value, meaning insiders have been consistent net sellers into the stock's elevated range this year.
The RDDT setup now centres almost entirely on what Q2 earnings deliver on July 30. The last three consecutive quarterly prints produced positive one-day moves — including the 12.7% gap in April — and the Street's mean price target of $225 implies roughly 30% upside from current levels. Whether the short build at 12.7% of float represents smart money front-running a miss, or a crowded bet that gets squeezed on another beat, is the question the July 30 release will answer.
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