MercadoLibre reported Q2 results on August 5. The pre-earnings borrow spike has fully reversed. Bears have covered, but options traders haven't entirely relaxed.
Borrowing costs hit roughly 1.0% ahead of the Q2 print — a level flagged in the pre-earnings notes here. That spike is now gone. Cost to borrow has collapsed 63% over the past week to 0.36%. It is back near the lows of the past two months.
Short interest tells the same story. Positions fell 12.1% over the past week to 1.65% of the free float. That is the lowest since late July. Bears who built positions ahead of the print have covered and moved on. Borrow availability remains extraordinarily loose — over 24 million shares available to borrow against under 900,000 shorted.
The earnings reaction itself was muted: the stock fell 3.1% on the day and is down 4.9% on the week. The stock closed at $1,828 on August 12, against an analyst consensus price target of $2,250 — roughly 23% above current levels.
The lending market says the bear trade is over. Options say traders aren't quite ready to stand down.
The put/call ratio sits at 0.94. That is 1.4 standard deviations above the 20-day mean of 0.89. The pulse that triggered this report flagged a reading of 0.97, which was 2.6 standard deviations above mean — a level the data describes as the highest options sentiment shift since early July. The PCR has eased slightly from that peak but remains elevated.
This divergence is notable. The borrow market has normalised. The options market is still carrying more defensive positioning than it did before earnings season.
Two analyst actions arrived in the days following the Q2 report. JP Morgan's Marcelo Santos raised his price target from $1,900 to $2,150, maintaining a Neutral rating. Cantor Fitzgerald's Deepak Mathivanan raised to $2,300 from $2,150, maintaining Overweight. Both moves came after the earnings release. Neither firm changed their rating — the target lifts reflect improved estimates, not a change in conviction.
The stock is trading well below all of these targets, including the JP Morgan Neutral.
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