RMBS heads into the back half of August with an unusual split: short sellers have been quietly covering while options traders have grown more defensive — a divergence that frames the stock's next move around the Street's reaction to July earnings rather than any positioning squeeze.
The clearest shift in positioning is on the short side, and it points away from bearishness. Short interest has fallen roughly 24% over the past month to 3.8% of free float, with the sharpest drop coming in the first half of this week — shares short slipped from 4.3 million to 4.1 million between August 10 and August 13. That covers an earlier spike from late July when shorts briefly crossed 5.3 million shares (around July 8-9), coinciding with the earnings release. The retreat since then suggests that whatever tactical bets were placed heading into Q2 results have largely been unwound. Borrow costs reinforce how unthreatening the setup is: the cost to borrow is 0.43%, barely above its month-ago level, and availability is extremely loose at over 3,000% — meaning there are roughly 30 shares available to lend for every one currently borrowed. This is not a squeeze-prone name by any measure.
Options paint a more cautious picture. The put/call ratio is running at 0.82, well above its 20-day average of 0.68 and close to the 52-week high of 0.88. The move is statistically meaningful — about 1.2 standard deviations above the recent norm — and the shift has been abrupt: the PCR spent most of July below 0.60 before stepping up sharply in early August. That timing lines up with the post-earnings price drop. fell 8.6% on July 28 after the Q2 print, and has given back roughly 4% more over the five days that followed. The stock closed Friday at $100.85, down about 4.3% from a month ago. Options traders are hedging more aggressively now than at any point in recent months, even as short sellers have been retreating.
The Street remains broadly constructive, though enthusiasm has been trimmed. After lifting targets aggressively following the prior earnings cycle — Evercore ISI had moved from $119 to $172, Wells Fargo from $115 to $145, Jefferies from $120 to $145 — the most recent post-Q2 action was a step back. Evercore ISI lowered its target to $160 (from $172) while keeping an Outperform rating; Rosenblatt held at $165 with a Buy. Benchmark initiated coverage in mid-July with a Buy and a $165 target. The mean consensus target is around $147.50, about 46% above Friday's close — a gap that reflects either genuine upside conviction or targets that have simply not fully reset after the stock's sharp decline from its late-May highs near $170. The forward EPS growth factor ranks in the 95th percentile of the universe, and the EV/EBITDA of roughly 22x has compressed about 4% over the past month. Bulls point to MRDIMM adoption and AI-server memory interface demand; bears focus on licensing revenue variability and a cost structure that leaves limited room for operational leverage.
Institutional flows add a further wrinkle. Fidelity added over 6.6 million shares in its last reported quarter, making it the second-largest holder with nearly 10% of shares. Invesco added 1.9 million shares. BlackRock, the largest holder at 12.9%, also added about 767,000 shares in the period ending July 31. Against that buying, insider selling has been persistent: virtually every recent insider transaction in the past 90 days has been a sale, totalling over $10 million in net disposals. The Chairman of the Board sold 5,000 shares at around $100.92 on August 7 — notably close to current levels — while the COO and several directors were active sellers in May and June at prices well above current trading. That insider-to-institutional divergence is worth watching: funds have been adding while those closest to the business have been consistently reducing exposure at higher prices.
The next earnings event is pencilled in for October 26. Between now and then, the key question is whether the post-Q2 repricing — from the $170 range to just over $100 — has reset expectations sufficiently, or whether the licensing revenue mix and cost structure concerns that the bear case highlights will continue to weigh on sentiment. Peers LSCC and MPWR both closed roughly flat on the week while AMD and NVMI each gained over 6%, suggesting this week's semiconductor tone was broadly constructive — a backdrop that RMBS largely failed to capture. The put/call ratio at near-52-week highs is the signal most worth tracking into October.
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