Blue Owl Capital posted earnings on August 6 and has now rallied 18% on the week to $11.57 — yet the short position that defined the pre-earnings setup has barely moved, leaving a high-conviction bear camp intact even after a punishing squeeze.
The short side tells the more interesting story here. Short interest has barely budged, easing just 0.1% on the week to 19.5% of free float — nearly one in five shares remains sold short despite the stock's 28% gain over the past month. Bears are not retreating. The borrow market, however, has loosened considerably: availability has jumped from roughly 218% a week ago to 322% now, meaning there are more than three shares available to borrow for every one currently lent out. Cost to borrow remains low at 0.73%. That combination — large short base, loose borrow conditions — means the structural squeeze pressure described in last week's earnings preview has not materialised. New shorts can enter cheaply and easily. Options traders have turned slightly more defensive following the earnings pop, with the put/call ratio rising to 1.36, about 1.7 standard deviations above its 20-day average of 1.29. That's an elevated reading for OWL but not extreme relative to the 52-week high of 2.07.
The Street is cautiously constructive but notably behind the price. Multiple analysts lifted targets in the days surrounding the earnings release — Goldman Sachs moved to $10.50 from $9.50 on August 3, BMO Capital raised to $12.00 from $11.00 on the same day, and Barclays lifted to $10.00 from $9.00 last week. The consensus mean target is $12.38, barely above the current price of $11.57, which means the Street's post-earnings optimism is essentially already priced in. Goldman holding Neutral with a $10.50 target while the stock trades above $11.50 is a notable mismatch. Oppenheimer, meanwhile, trimmed its target to $15.00 earlier in July, a reminder that at least some bulls see fair value well above current levels. The forward earnings yield factor ranks in the 97th percentile — the market is pricing in a sharp earnings recovery — but near-term EPS momentum scores rank in the bottom third of the universe, suggesting that recovery remains more anticipated than demonstrated. The ORTEX short score has eased to 65 from a recent peak near 68, reflecting the improvement in price momentum, but remains firmly in elevated territory.
Institutional ownership adds an interesting layer. Capital Research holds 17.5% of shares — a dominant anchor position. Fidelity (FMR) added 1.6 million shares through June and now holds 11.6%. BlackRock and State Street also added modestly through June. The large institutional base provides a structural bid, but with the mean analyst target now sitting only 7% above the current price, it limits the conventional upside argument at these levels. The most recent insider activity on record — a cluster of director and executive sales in February at $12.30 — was conducted at prices above where the stock trades today, an observation that adds texture without demanding a conclusion.
The key variable to watch is what the earnings release actually showed on AUM trends, redemption rates in the non-traded BDC funds, and digital infrastructure fee income — the bear case has consistently centred on redemption discipline and the bull case on infrastructure deal flow.
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