TeraWulf enters the back half of August with the stock down 11% in a single session and short sellers showing no signs of retreat — a combination that has pushed options traders to their most defensive posture in months.
The short position has continued its post-earnings build. Bears now control 26.7% of the free float — roughly 112 million shares — up from 26.3% a week ago and materially above the ~104 million shares that characterised the pre-August period. The week-on-week increase of 7.8% confirms the trend flagged in Tuesday's note is intact: shorts rebuilt swiftly after the Q2 miss and have not given ground. The FINRA day-to-cover ratio remains at 3.34 days. The more interesting development this week is in availability, which has tightened sharply. After loosening to 130% earlier in the month — a point noted as removing squeeze pressure — the borrow market has flipped: availability has fallen to 63%, down more than 51% on the week and back to the tighter levels seen in late July. Cost to borrow ticked up to 0.64%, a 13% weekly rise, though it remains low in absolute terms. The borrow is no longer as comfortable for shorts as it was seven days ago.
Options positioning has turned the most defensive it has been in recent months. The put/call ratio jumped to 0.41 — more than three standard deviations above its 20-day mean of 0.35 — a reading that sits near the top of the past year's range. That is not a subtle shift. It suggests investors are actively reaching for downside protection, likely in response to the continued price weakness and the elevated short interest backdrop. The PCR had been running in a tight band around 0.33-0.34 for most of July; the move to 0.41 in a single session is the clearest signal of a sentiment shift in the current data.
The Street remains broadly constructive but has started trimming numbers. Morgan Stanley, in the most significant recent move, maintained its Overweight rating but cut its price target to $62.50 from $72 — a meaningful reduction, though the target still implies substantial upside from the current $15.62 price. Other firms held their Buy and Outperform ratings steady, with B. Riley lifting its target to $40 earlier in the month. The consensus mean target of $36.63 is more than double the current price, which reflects either genuine conviction that the HPC transition will unlock value or targets that have not yet fully adjusted to the post-earnings reality. Bulls point to the HPC segment's revenue growth — from $18.4M to $31.9M year-on-year — and contracted revenue building toward $695M in FY2027. Bears cite ongoing losses, with the PE multiple sitting at -52.5x and book value deeply negative, and flag execution risks in the mining-to-AI pivot alongside the New York data center permitting freeze. EPS momentum factor scores rank in the 95th-99th percentile, reflecting strong estimate revisions, but the short score at 70.2 has edged higher all week and ranks in just the 5th percentile of the universe — firmly in short-pressure territory.
Institutional ownership adds a layer of nuance. The Bank of Nova Scotia added 12.4 million shares as of June 30, becoming the largest disclosed holder at nearly 8% of shares. Jane Street added close to 17.9 million shares in the same period. Those are meaningful accumulations. Against that, CEO Paul Prager sold $3.7 million of stock in late June at prices roughly 70% above where the stock trades today. An independent director bought roughly $50,000 worth at $17.47 and $16.54 this week — modest sums, but notable for timing given the selloff.
Peers offer little comfort. CORZ fell 6.4% on the day and 4.6% on the week. CIFR dropped 13% in a single session. HUT shed 8.2% on the day and 9% on the week. The broader crypto-infrastructure group is under coordinated selling pressure, suggesting macro or sector-level factors are amplifying whatever company-specific concerns surround WULF. The next earnings event is not until November 11 — a long runway during which the interplay between availability tightening and the elevated short position will be the primary mechanical variable worth tracking.
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