Daily Journal Heads Into Print With Shorts in Retreat

DJCO arrives at its August 14 earnings release with short sellers quietly unwinding positions — a notable backdrop for a stock that has pulled back 7% in a week.

Short interest has fallen roughly 20% from late-July peaks, dropping to around 150,000 shares after briefly touching 187,000 in mid-July. That withdrawal is happening into a weak tape: the stock closed at $557.01 on Wednesday, down 3.3% over the past month. The borrow market reflects no particular urgency on either side. Cost to borrow is a negligible 0.60%, and availability is comfortable at around 121% — meaning there are meaningfully more shares available to lend than are currently borrowed. The ORTEX short score of 65.5 has also eased from 67.3 a week ago, reinforcing the picture of retreating rather than building bearish conviction.

The more interesting ownership story is on the institutional side. RWWM, Inc. holds a commanding 26% of shares, making DJCO effectively a closely-held vehicle. BlackRock added over 11,000 shares in the most recent reported period — a meaningful move for a name this thinly traded. Vanguard Capital Management initiated a new position of 46,341 shares as of June 30, and a separate Vanguard entity built a fresh stake of 40,000-plus shares as of March 31. That accumulation from passive and index-adjacent managers suggests the float is getting tighter, not looser, even as shorts exit. Insider data in the snapshot is too stale — last trades from late 2020 — to inform the current setup.

What bulls and bears actually disagree on here is how to value a company that straddles three distinct businesses: a declining newspaper operation, a court-technology software unit, and a concentrated equity portfolio historically anchored in financial stocks. The ORTEX stock score of 75 is driven almost entirely by momentum — the 95th-percentile momentum reading reflects a stock that has outperformed over the past year — but quality scores drag at 37 and value sits subdued, with a reported P/E near 48. The peer group offers a mixed read: PRGS gained 3% on the week while EVCM lost 17% and ACIW fell nearly 9%, suggesting there is no sector tailwind that DJCO can lean on. Past prints have been volatile in both directions — a 3.4% gain after May's release, a 4.8% drop after February's — with no consistent directional pattern.

The earnings report will therefore test whether the court-technology software unit can demonstrate enough revenue growth to justify a near-50x multiple on a business that most of the market finds difficult to model cleanly.