Forum Energy Technologies heads into today's Q2 earnings release with short sellers notably more aggressive than they were a month ago — yet the lending market tells a very different story about how crowded that position actually is.
Short interest has climbed 43% over the past month to 6.5% of the free float, with the bulk of that build arriving in two distinct waves: a jump around July 10 and a further step-up last week. At roughly 743,000 shares short and 5.4 days to cover on the official FINRA count, the position is meaningful for a stock of this size. Borrowing costs have also picked up sharply — the cost to borrow has more than doubled over the past week to 1.1%, having sat below 0.6% for most of June. That acceleration in borrow cost, alongside the rising short interest, suggests active new positioning rather than stale shorts sitting on old trades. The stock itself fell 10.6% on the week heading into the print — a drop that stands out against peers: OIS shed 11.2% and NOV fell 6.2%, so FET's weakness broadly mirrors sector pressure, though it sits at the heavier end of that range.
The lending pool, however, remains far from strained. Availability is extremely loose at roughly 2,767% — meaning there are approximately 28 shares available to borrow for every one already lent out. That reading has actually risen over the past week, up from levels closer to 1,900% two weeks ago, which suggests lenders are actively making more stock available as demand from shorts ticks higher. There is no squeeze pressure here. Options positioning has shifted modestly more cautious, with the put/call ratio at 0.34 against a 20-day average of 0.25 — about one standard deviation above normal — but still well below the 52-week defensive extreme of 0.49. Taken together, the setup reads as selective bearish conviction rather than a panicked pile-on.
The debate heading into the print is fundamentally about whether FET's revenue exposure to subsea and international equipment demand holds up as North American drilling activity softens. The bull case rests on the stock's strong year-to-date momentum — up around 53% into early July — and analyst consensus pointing to a mean price target near $67, implying roughly 30% upside from the current $51.43 level. The bear case, reflected in last week's selling and the sharp short interest build, is that the stock ran well ahead of fundamentals: the ORTEX stock score notes value remains a clear weak point with a stretched price-to-FCF multiple and no positive earnings yield. The most recent prior quarter print reinforced that concern — FET fell 5.3% on the day and 14.6% over the five days following its May earnings release. The analyst data available is dated and cannot be cited as current direction, but the price action and short build suggest the Street has grown more selective on valuation since the early-year rally. On the institutional side, BlackRock and Dimensional both added shares through June, providing some counterweight to the bearish flow, while State Street added materially — 113,000 shares reported through June 30.
The Q2 print will test whether FET's top-line execution and margin delivery can justify a stock that, even after a rough week, trades at a meaningful premium to where bears think the fundamentals sit.
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