WEBTOON Shorts Ease as Options Flash Bullish

WBTN enters the week on a recovering footing — up 6.2% over the past five sessions to $8.80 — yet the ORTEX short score remains stubbornly elevated at 84, and the analyst community has just spent its post-earnings week cutting targets.

The most striking shift in positioning is in options, where sentiment has swung sharply toward calls. The put/call ratio collapsed to 0.23, well below its 20-day average of 0.86 and near the 52-week low of 0.19. That is almost a full standard deviation below the recent mean — a pronounced move toward bullish positioning that stands in sharp contrast to where the stock was trading just two weeks ago, when the ratio sat above 1.9 during the earnings-driven selloff. Options traders have pivoted decisively in favour of upside exposure. Whether that reflects genuine conviction or simply an unwind of the pre-earnings hedges is the open question.

Short positioning tells a quieter story. Short interest has drifted lower for most of the past six weeks, from roughly 4.83 million shares in mid-July to 4.46 million, putting it at 3.4% of the free float — modest by any measure. Borrow cost has also eased, running near 5.1% after touching a 30-day peak above 7.2% in early August. Availability has loosened materially: from just 15% available in early August — less than one share in the lending pool for every six already borrowed — to 54% now, the least tight the borrow market has been in several weeks. That easing tracks the short interest decline and removes much of the mechanical squeeze risk that was building through late July and early August.

The Street is less optimistic than the options market. Two analysts moved on August 11 — JP Morgan's Dae Lee trimmed his target from $11 to $10 while holding a Neutral rating, and Evercore ISI's Mark Mahaney cut from $15 to $12, his third consecutive reduction despite maintaining an Outperform. The consensus mean price target now sits at $11.29, implying roughly 28% upside from the current $8.80. But that target has been falling steadily: a year ago targets were clustered in the $20-25 range, reflecting how far expectations have been reset. The valuation picture is complex — the PE multiple is running at 45x after expanding about 9 turns over the past week on the price recovery, while price-to-book sits below 1x at 0.94, offering some floor on asset value. EPS momentum scores rank in the bottom decile of the universe over both 30 and 90 days, and EPS surprise ranks near the very bottom at the 2nd percentile.

The ownership structure adds an important constraint that rarely changes. NAVER Corporation holds 59% of shares and SoftBank 23%, leaving a thin tradeable float. FMR LLC recently added about 173,000 shares, and BlackRock added nearly 399,000 — incremental accumulation at the margin from the major institutions, but nothing dramatic enough to move the needle given the concentrated strategic holdings. Insider selling has been consistent and small — the officer and director David Lee has sold in batches at prices ranging from $9.12 to $13.24, and the Chief Strategy Officer Kim Yongsoo has done the same across multiple transactions since February. None of the trades are large in dollar terms, but the pattern of persistent selling at higher prices is a gentle counter to the bullish options positioning.

Earnings data worth noting: the August 10-11 print resulted in a 1.4% one-day decline and a 5.6% five-day drop. The next scheduled event is November 11. Between now and then, the debate is less about the short book — which has been unwinding methodically — and more about whether the call-heavy options positioning reflects real demand for the name or simply a mechanical rotation out of the puts that accumulated heading into the last result.