CoreWeave's Short Retreat Continues, but Borrow Costs Tick Back Up

CRWV slipped another half a percent on the week to CAD 16.78, a modest pullback that masks a more interesting story unfolding in the lending market — where short covering has accelerated sharply, but borrowing costs are quietly moving in the opposite direction.

The short-side retreat flagged in last week's note has extended dramatically. Borrowed shares fell 69% over the week, dropping from roughly 157,000 at the early-September peak to just 48,700 by September 11. That is a near-total unwind of the position that built through late August, and it follows the pattern noted previously — shorts have been covering into price weakness rather than pressing the trade. The ORTEX short score has drifted lower alongside, now at 27.3 and ranking in the 12th percentile of the broader universe, confirming that short-side pressure remains well below what peers typically carry. The short score has been remarkably stable over the past two weeks, oscillating between 27.3 and 28.6 without a decisive break in either direction.

The borrow market tells a slightly more complicated story. Cost to borrow jumped 34% over the week to 5.23%, reversing a dip to below 2% mid-week on September 9. That mid-week trough — when CTB briefly fell to 1.99% — now looks like a brief loosening during peak covering activity, with the rate snapping back as that wave of short-covering completed. The pattern through September mirrors early August: CTB oscillates in the 3.4–5.5% band, periodically spiking above 5% before retreating. Nothing in the current reading suggests a structural tightening of the borrow, but the bounce off the low is worth tracking — if borrowed shares stabilize at this reduced level while CTB stays elevated, it would suggest new shorts are attempting to establish positions at lower absolute levels of interest, a different dynamic from the covering squeeze of the past fortnight.

The fundamental backdrop remains genuinely unusual for a name at this price level. A recent company note flagged a 376% year-over-year jump in revenue backlog to $104 billion, and forward EPS momentum ranks in the 82nd percentile on a 30-day basis and the 86th percentile over 90 days. The ORTEX stock score's Growth pillar, at 56.6, and the 194-point forward EPS revision figure sit in sharp contrast to the Quality and Value drags — an f-score of just 3.0 and negative return on assets reflect a business still burning capital to build out infrastructure at scale. The EV figure of roughly $36.7 billion is dated to year-end 2025, so current valuation context is thin, but the analyst community has priced in substantial upside; the tp_diff of 66.4 embedded in recent scores implies meaningful distance between current price and consensus targets. Note: given the stock is listed on TSX and priced in CAD, any USD-denominated price targets should be treated with caution for direct comparison.

On the institutional side, BlackRock added 14.7 million shares as of August 31 — a material build that brings its stake to 4.4% of shares outstanding. Vanguard entities collectively added roughly 8 million shares across two funds during the period. Both moves run counter to the trimming visible among insiders: CEO Michael Intrator reduced his holding by 3.1 million shares as of September 8, while co-founders Brannin McBee and Brian Venturo also cut positions modestly over August. The institutional accumulation from passive and active managers sits alongside that insider reduction, creating a genuinely two-sided ownership picture.

Next earnings are scheduled for November 11. The single prior print in the dataset produced a 22% next-day gain and a further 6% over the following five days — a strong positive reaction that sets a high bar for the next release. Between now and then, the key question is whether the short covering that defined September has fully exhausted itself at the 48,700-share level, or whether new bearish conviction builds again as borrowing costs have started to creep back up.