Forgent Power Solutions has now shed 20% in a single week and 24% over the past month, yet this week something in the positioning data actually shifted direction: short sellers are unwinding rather than pressing.
The short-side retreat is the clearest new development since last week's report. Short interest has fallen 6.5% over the past seven days, dropping from 7.32 million shares on June 30 to 6.57 million by July 7. That follows a pattern that has been building since mid-week — daily readings show a consistent step-down from 7.18 million on July 1 to 7.09 million, 6.86 million, then Tuesday's 6.57 million. The short book has now given back roughly half of the June build. This is a meaningful reversal from the picture at the time of last week's report, when the offering hangover narrative was still driving the positioning story. Borrow conditions are entirely consistent with orderly covering: availability is extraordinarily loose at 743%, roughly seven shares sitting available for every one already out on loan — up sharply from 325% just two weeks ago and near the highest level this year. Cost to borrow has drifted lower to 0.36%, a fraction of what a genuinely stressed borrow market would look like.
The ORTEX short score confirms the direction of travel. It has declined from 45.8 on June 30 to 39.0 on July 7, a move that tracks almost perfectly with the pace of short-side covering. A score in the high 30s is solidly below the midpoint of the range, suggesting the bears are becoming meaningfully less active even as the price continues to soften.
Options positioning is calm rather than defensive. The put/call ratio at 0.60 is only modestly above its 20-day average of 0.57 — a z-score of 0.44, well within one standard deviation. Given the stock is down 20% on the week, the absence of a pronounced spike toward protective puts is notable. The 52-week PCR range runs from 0.0 to 1.12, so at 0.60 the reading is entirely mid-range. Options traders do not appear to be scrambling for downside hedges at current levels.
The Street remains unmoved in its constructive view, even as the stock tests their conviction. Seven analysts carry buy-equivalent ratings with no bears in the count, and the mean target of $59.78 now implies 34% upside from Tuesday's $44.67 close. TD Cowen's June 22 target raise to $73 was the most aggressive call — it implies 63% upside from here and is now the most challenged in the room. Goldman Sachs and Oppenheimer both moved to $60 after the May earnings print, while Morgan Stanley holds a more cautious stance with a $51 Equal-Weight target that is actually slightly above where the stock trades today. The valuation backdrop offers some support: EV/EBITDA of 37.7x has compressed from above 39x a month ago, and the PE at 64.6x is similarly lower after the selloff. Whether those multiples are demanding or fair for a company in the heavy electrical equipment space is the core bull-bear debate.
The dominant ownership context remains the same as last week: Neos Partners reported trimming 34.7 million shares on June 1, a transaction worth over $2.2 billion at $45.71 per share. That single seller accounts for the persistent supply overhang. Their remaining stake is still 45.3% of shares outstanding — 110.5 million shares — meaning the offer hangover dynamic is far from resolved. FMR and Janus Henderson each reported new positions above $500 million in late May, which provides at least some institutional demand to absorb the secondary pressure, but neither position is large enough on its own to absorb further Neos supply.
The next chapter is less about whether short sellers are pressing and more about whether the Neos Partners overhang produces additional supply, and how quickly the growing gap between the current price and seven analysts' buy targets either closes or forces target cuts.
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