COMPASS Pathways enters the second half of August with a striking disconnect — the stock is up 13% on the week and has nearly doubled year-to-date, yet short sellers have been rebuilding positions at a pace not seen in months.
The short-selling story is the most striking tension here. Estimated short interest has climbed roughly 70% over the past month, rising from around 8.3 million shares in early July to 14.1 million shares now. That is a sustained, deliberate rebuild — not a one-day blip. The move accelerated after a positive earnings print on August 5, when the stock jumped nearly 15% in a single session. Shorts added through the pop rather than covering into it, which signals conviction rather than panic-driven positioning. The lending market has tightened sharply in response. Availability dropped from roughly 940% in early July — essentially unlimited borrow supply — to 161% now. That is still in the "tight" zone but not yet stressed; borrow costs remain low at 0.53%, and the 52-week low on availability was a near-total lockout at just 0.5%. The current trajectory, though, is firmly in one direction: shorts are absorbing the available supply faster than lenders are adding it.
Options traders are telling a very different story. The put/call ratio sits at 0.26 — close to the low end of the past year's range, with the 52-week floor at 0.12 — meaning call open interest vastly outweighs puts. The z-score of 0.34 puts this right in the middle of the recent distribution, nothing extreme. That is consistent with a stock running on positive momentum, where call buyers dominate. The contrast with short interest is explicit: shorts are rebuilding while options traders remain largely bullish in their positioning. These two signals are pointing in opposite directions, and that tension is what makes the setup interesting.
The Street is broadly constructive but splintered on targets. Morgan Stanley raised its target to $18 from $17 this week while holding an Overweight rating. RBC trimmed slightly to $21, B. Riley lifted to $22 from $17, and HC Wainwright — the most enthusiastic — cut from $70 to $65, still a level far above the current price that the broader Street does not endorse. Wells Fargo initiated at Equal-Weight with a $13 target last month, the one note of caution from a larger firm. The mean analyst target is $23.75 against a current price of $13.38, implying substantial upside on paper — though the $65 target from HC Wainwright is a significant outlier that inflates that average. The bull case centers on the rolling NDA submission for COMP360, COMPASS's proprietary psilocybin formulation for treatment-resistant depression, a commercially favorable label outlook, and early prescriber interest. Bears flag the binary nature of FDA approval risk, an entirely pre-revenue business model, and an emerging market with no established commercial comparables. Factor scores back the bulls on earnings momentum — CMPS ranks in the 97th percentile on both EPS surprise and 30-day EPS momentum — but the short score of 69 and a short-score rank in just the 13th percentile reflect the market's ongoing skepticism.
On the institutional side, two fresh entries stand out. Marshall Wace added 4.0 million shares in Q1, building a near-3% stake from zero. Tang Capital also entered with 4.0 million shares. ARK Investment Management, reporting as recently as July 31, holds 3.3 million shares after adding 1.35 million this year. Those are meaningful votes of confidence from active managers who run concentrated books. Against that, the most recent insider activity is a CEO sell of just under $67,000 in early August — a small, likely pre-programmed transaction rather than a directional signal.
The next formal earnings date is November 5. The watch between now and then is whether the NDA rolling submission produces any FDA feedback that moves the approval timeline — and whether the lending market tightens further as short interest continues to accumulate against a stock sitting near its highest level of the year.
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