GRPN is in a rare situation this week — bears are retreating for the first time in months, yet the lending market is nowhere near ready to confirm a clean exit.
The covering story is real but needs context. Short interest fell 6.6% on the week to 30.7% of free float, with bears returning roughly 840,000 shares in a single session on August 25 — the largest single-day unwind in the 30-day history. That marks the first sustained pullback after the position climbed from roughly 29% of free float in late July to a peak near 33%. In absolute terms, the short base still stands at 12.5 million shares, and the ORTEX short score has eased only slightly, from 79.1 earlier in the week to 78.8 — still deep in bearish territory and ranking in just the 2nd percentile of the ORTEX universe on short score. The bears are trimming, not fleeing.
What makes the covering interesting is how little room there is to cover cleanly. Availability is just 8.9% — fewer than nine shares left in the lending pool for every hundred already borrowed — and that reading actually tightened over the week, down from 9.6% on Monday. For context, availability was 14.6% as recently as August 14, and the 52-week low hit 0.37% on July 31. The borrow market has been structurally stressed for months; today's level is not peak stress, but it is nowhere near easy. Cost to borrow has also moved — up 25% on the week to 2.82%, its highest level of the past 30 days. Lenders are not yet charging a panic premium, but the rate is rising at the same time availability is tightening. That combination makes large-scale covering expensive and logistically awkward. Options traders, meanwhile, are leaning the other way entirely: the put/call ratio has dropped to 0.32, nearly two standard deviations below its 20-day mean of 0.38 and close to its 52-week low of 0.31. That is an unusually call-heavy setup for a stock down 24% in a month.
The Street is structurally split on GRPN, and the recent earnings reaction history gives the bear case more empirical weight. Goldman Sachs — the most recent bellwether to file a note, back in May — maintained a Sell rating and raised its target only to $13, well below the current price of $19.59. The consensus mean target of $30.67 looks generous given where the stock is trading, though the most recent Goldman action implies the stock still has room to fall from here. The Q2 print in August told a grim story: the stock dropped 8.7% the next day and 14.5% over the following five sessions. The prior comparable event produced an 8.3% one-day drop and a 19.5% five-day loss. The pattern is consistent — Groupon earnings have been air-pocket events, not catalysts. The next print is scheduled for November 6. The PE multiple has compressed 4 points over 30 days to 11.9x, and EV/EBITDA has slipped to 10.1x, both moving in the direction of the bear case. Factor scores are almost uniformly weak: EPS surprise ranks in the 5th percentile, days-to-cover in the 15th, and utilization rank in the 2nd.
One institutional footnote worth noting: Millennium Management added 1.1 million shares as recently as August 12, bringing its stake to 5% of shares outstanding. Divisadero Street Capital also added 1.4 million shares through June 30. These are meaningful additions against a backdrop of sustained short pressure. The CEO, Dusan Senkypl, sold $22.3 million of stock at $16.54 on June 11 — well below the current price — which is an awkward data point for the bull case regardless of how it was framed at the time.
The setup heading into the back half of August is therefore one of contested equilibrium: bears are covering, but not running; availability is tight, but not zero; options traders are buying calls, but the last two earnings prints both produced double-digit five-day losses. How that covering pace evolves relative to the tightening borrow pool — and whether availability continues to drift lower — is the mechanical detail worth tracking most closely into September.
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