ONDS: Cover Trade Dead in the Water, Borrow Still Locked

Ondas Inc. enters the week of September 8 with the short position locked in place, the lending market fully exhausted, and the stock having given back another 3.5% — a combination that has defined the past fortnight and shows no sign of resolution.

The covering that defined August has effectively stopped. Raw shares short have barely shifted from the 216–217 million range logged last week, and the week-on-week change is now essentially flat at -0.1%. From the August 14 peak of 238.5 million shares, bears have returned roughly 22 million — but that unwind appears to have run its course. Short interest as a percentage of free float now reads 58.8%, up from the 40-41% readings cited in the prior two notes; that jump reflects another float base revision rather than fresh short-selling, which remains a critical distinction. The raw position has not moved. What has moved is the denominator.

The borrow market confirms the impasse. Availability is at 0% — every share in the lending pool is currently lent out, a level that has persisted for the vast majority of the past six weeks. That is the tightest the borrow has been all year, matching the 52-week low. The one piece of the picture that has shifted is cost to borrow, which continued its slide to 5.98% annualised — down 18% on the week and roughly half the level seen in late August. That easing tells its own story: when CTB falls while availability stays at zero and the short position barely moves, it suggests the urgency to find new borrows has faded. Bears are neither covering aggressively nor pressing new positions. The setup is static.

Options positioning is not adding much directional signal. The put/call ratio of 0.45 is barely above its 20-day average of 0.44, with a z-score of 0.78 — well within normal range. Unlike the defensively skewed configurations sometimes seen ahead of binary events, ONDS options traders appear neither particularly hedged nor particularly bullish. The next scheduled earnings event is November 13, leaving a two-month window before the next obvious catalyst.

The Street remains uniformly constructive, even as the stock drifts. Following the August 14 print, Ladenburg Thalmann raised its target to $22.75 and Oppenheimer lifted to $18.00, while Needham reiterated its Buy with a $19.00 target. Roth Capital initiated in August with a $13.00 Buy. The mean target of $19.42 implies more than 150% upside to the current $7.62 close — a gap that reflects persistent analyst optimism on the autonomous systems and defence exposure thesis, and equally persistent market scepticism on when that thesis translates into earnings. EPS surprise ranks in the 96th percentile, an impressive beat record, but forward EPS momentum scores in the bottom decile of the universe. The market is cutting profit forecasts even as top-line growth draws analyst attention.

Institutional flow adds one genuinely interesting data point. BlackRock added roughly 30 million shares in its most recent reported period to reach 6.9% of shares, filing a fresh Schedule 13G in late July. Laurence Hirsch also appeared on the register in July at 5.7%. Those are new 5%-threshold disclosures from sophisticated holders — not trivial for a micro-cap in a structurally challenged tape. An earlier Schedule 13D activist filing from Joseph Popolo, whose stake has since been reduced to 4.95% from 8.32% per a June 2025 amendment, is worth flagging: an activist is on this register, though that position appears to have been substantially trimmed. Per standard disclosure caveats, stakes are as-last-reported around the 5% threshold, and holders can exit below that level without a further filing.

The one number that remains unchanged across three consecutive notes is the most telling: with the borrow fully locked and the cover trade stalled, the next meaningful move likely depends on whether the cost to borrow stabilises here or continues declining toward levels that make adding new shorts economically straightforward again.