Ondas Inc. closed Tuesday at $8.24, down 9% on the week, as short sellers quietly continued their retreat from a position that remains one of the largest in the small-cap universe.
The cover trade is the week's most legible data point. Short interest fell to 221 million shares — 60.1% of the free float — down from 231 million last Tuesday and 238.5 million at the August 14 peak. That 7% weekly decline extends a steady unwind that started mid-August. To keep the scale honest: bears built this position from roughly 29% of float in early June to above 64% by late July. They have now trimmed it back toward 60%. The direction of travel has changed, but the remaining position is still enormous. What has not changed at all is the lending freeze. Availability is 0% — every share in the pool remains out on loan, a condition that has held without a single interruption for over six weeks and matches the 52-week tightest reading. Bears who want to add must find borrow elsewhere. Cost to borrow has eased meaningfully, falling 13% on the week to 10.4% annualised, down from a peak of 20.4% in late July, which suggests the gradual cover activity is releasing some pressure from the pool — but "eased" is relative. Borrow still costs more than double what it did in mid-July.
Options traders are leaning bullish relative to the defensive positioning seen earlier in the cycle. The put/call ratio came in at 0.43 on Tuesday, fractionally below its 20-day average of 0.44. The z-score is negligible at -0.55, so there is no strong signal either way — but the drift from above 0.48 in late July to below 0.44 now is consistent with the broader rotation away from hedging that began when bears started returning shares. The ORTEX short score has edged lower for seven straight sessions, from 75.9 on August 14 to 74.6 today, suggesting the composite pressure on the lending market is fractionally easing week over week even as the absolute level remains extreme. Both the short score rank (1st percentile) and availability rank (1st percentile) confirm this is still the tightest end of the universe — the score is moving in the right direction, just very slowly.
The analyst community is not waiting for the shorts to settle before making their views known. Three actions in the past two weeks tell a consistent story. Ladenburg Thalmann raised its target to $22.75 from $21.50 on August 17, maintaining its Buy. Oppenheimer lifted to $18 from $16 on August 14, keeping its Outperform. Needham reiterated its Buy at $19. Roth Capital initiated at Buy with a $13 target on August 11 — the most conservative of the four but still comfortably above the current price. The mean analyst target of $19.42 implies roughly 136% upside from Tuesday's close, a gap that reflects both genuine Street optimism and the stock's retreat from recent highs. The bull thesis centres on the DZYNE Technologies acquisition and the projected revenue ramp. Bears point to extended defense procurement cycles, slow commercial adoption, and M&A integration costs that could suppress margins even as top-line growth impresses. The ORTEX EPS surprise factor score sits in the 96th percentile, suggesting the company has been beating estimates consistently — but forward EPS momentum has deteriorated sharply, meaning analysts are cutting profit forecasts even as revenue grows.
Institutional flows add a layer worth watching. BlackRock added 30.2 million shares in the most recent reported period, bringing its stake to 39.5 million shares and making it the largest institutional holder at 6.9% of shares outstanding. State Street added 9.2 million shares in the same window. Highlander Partners holds 32.7 million shares, reported as an entirely new position. That is a material accumulation from index and active managers arriving simultaneously with the short book's peak — the tension between those two forces has defined the past month and is not resolved yet. The post-earnings reaction on August 13 was a 5.4% one-day decline followed by a further 14.2% drawdown over five days, setting the floor the stock has been trading near since.
With no next earnings date yet set, the clearest thing to monitor is whether the short cover pace accelerates — a sustained weekly reduction of more than 5% in shares short would begin to meaningfully change the positioning picture — and whether the borrow cost continues its month-long slide back toward the single-digit levels seen in early July.
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