SoundHound AI ends the week with a cleaner short-interest picture than it has seen in months — yet the structural conditions underneath remain almost entirely unchanged.
Short interest has continued its post-earnings retreat. At 41.1% of the free float as of August 14, the position has fallen from the late-July cycle peak of 43.8% and is now running at its lowest level in the period covered by this data. The weekly reduction of around 5.4% in shares short — approximately 8.5 million shares — extends the de-risking that began after two consecutive earnings beats. The direction of travel is unambiguous. What that headline number obscures, however, is the mechanism: availability remains pinned at exactly 0%, a condition that has held without exception across every single session in the 30-day history. The lending pool is completely exhausted. Covering is happening in the open market, not through the borrow facility returning shares. The short book is getting smaller, but the structural seal on the borrow market has not cracked.
Cost to borrow reinforces that picture, though the trend is now firmly downward. At 9.7% on August 14, it has fallen nearly 20% on the week and is down almost 30% over the month — the lowest level since early July and a long way from the May peak above 25%. That softening reflects a smaller short position paying carry, not a loosening of supply. With 0% availability, the borrow market remains as tight as it can be. The options market offers a modest counterpoint to the cautious read: the put/call ratio closed at 0.43, about 1.8 standard deviations above its 20-day average of 0.39. That is elevated relative to recent norms, but still well below the 52-week high of 0.67 — more a drift toward hedging than a full defensive rotation.
On the Street, the picture is one of guarded acknowledgment after earnings. DA Davidson's Gil Luria maintained his Buy rating on August 6 but trimmed his target from $12 to $10, while Piper Sandler held Neutral and cut from $8 to $7. Both moves came on the same day as the earnings print, suggesting the beat was real but not enough to shift the thesis materially. The consensus mean target sits at $12.71 — well above the current $7.43 close — though that figure is pulled higher by older, staler targets and should be read with some caution. The bull case centres on the $250 million LivePerson acquisition adding scale and cross-selling runway. The bear case is straightforward: approximately $392 million in debt, a business still generating negative operating income, and heavy revenue concentration in a handful of customers. Factor scores reflect the split — EPS momentum over both 30 and 90 days ranks in the 80th-90th percentile, but the short score rank of 1 and days-to-cover rank of 10 flag this as one of the most heavily shorted names in the universe by those measures.
The co-founder and CEO Keyvan Mohajer sold 126,540 shares on June 15 at $7.46, a modest sum relative to his 17.96 million share holding, and was joined by the COO, CTO, CSO and Chief Level Officer in coordinated same-day sales. The net insider flow over the trailing 90 days is slightly positive in share terms but that reflects prior equity grants rather than open-market buying. Institutional flows are more constructive at the margin: BlackRock added 1.58 million shares in the most recent reported period, and Vanguard's two entities together added over 1.19 million shares. The founder block — Mohajer and co-founder Seyed Emami — together hold roughly 8% of shares outstanding, which puts meaningful aligned interest alongside an equally meaningful short position.
The stock slipped 7.4% on the week to close at $7.43 despite the broader market holding up. PLTR gained 1.2% over the same period, U rose 7.6%, and OPRA added 1.9% — a week where comparable names mostly edged higher while SOUN pulled back. The next earnings event is not until November 5, leaving a long runway with no binary catalyst on the horizon. The live question — whether a 41% short position in a stock with a sealed borrow pool will continue a measured retreat or reassert itself — will be answered slowly, one session at a time.
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