Cost to borrow on CSWC hit 49% on July 14. That is nearly four times the level it sat at just one week earlier. The borrow market for Capital Southwest Corporation has effectively seized — and the data shows this is not a one-day anomaly.
Availability has collapsed to 8.6% as of July 14. For most of the prior week, it sat below 5%. On July 13 it touched 1.7% — meaning barely one share remained available to borrow for every 58 already lent out.
That is the tightest the borrow market has been in 52 weeks, with the 52-week minimum recorded at just 0.59%.
The pattern is clear: availability has oscillated between near-zero and single digits for the past month. This is not a temporary dislocation. Demand for borrows has persistently overwhelmed supply.
Short interest rose 21.4% in the past week alone. It now stands at 8.2% of free float — roughly 4.73 million shares. That is a meaningful position size in a BDC with a relatively constrained lending pool.
The squeeze dynamic here is straightforward. More shorts entered the stock. The lending pool could not absorb the demand. Availability cratered. Cost to borrow followed.
FINRA's fortnightly data, settled June 30, showed 4.9 million shares short with 6.35 days to cover. The ORTEX daily estimate now tracks below that figure, but direction is firmly upward again after dipping in early July.
The ORTEX short score reached 74.0 on July 13, up sharply from 68.8 the week before. That puts CSWC in the 3rd percentile for short score rank — one of the most elevated readings across the sector.
CSWC reports earnings on July 22. That date matters here. Options put/call ratio has risen to 0.90 from a 20-day mean of 0.72. The PCR z-score sits at 1.03 — elevated, though not yet extreme.
The bear case for CSWC centres on its higher equity allocation relative to BDC peers, which introduces NII volatility. The bull case rests on diversified middle-market exposure and reliable dividend income. The most recent analyst action — B. Riley raising its target to $24.50 in May — keeps the stock near fair value at current prices of $23.90.
Insiders sold in early June, with CEO Michael Sarner and CFO Christopher Rehberger both trimming positions around $23.50. A director also made a small purchase in mid-June.
See the live data behind this article on ORTEX.
Open CSWC on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
