Bending Spoons has seen its lending pool effectively drain over the past week. Availability has collapsed to 0.38%, leaving fewer than four shares available for every thousand already borrowed. The cost to borrow has followed, jumping 51% in seven days to 6.82%.
A week ago, availability stood at 15.5%. By September 23 it had fallen to 0.12%. It touched 0.01% on September 24 before settling at 0.38% as of September 29. That is the tightest reading in 52 weeks. Every share in the lending pool is currently lent out.
The cost to borrow moved in lockstep. It was 4.51% on September 22. It reached 6.82% by September 29, a level not seen in the prior 30-day range and well above the 5.09% average across August.
The positions being built are significant. Short shares outstanding have risen from around 13.6 million on August 24 to 18.8 million as of September 29, a 38% increase in roughly five weeks. The one-week change alone is nearly 12%.
FINRA's most recent fortnightly settlement figure, as of September 15, put short shares at 15.0 million with a days-to-cover reading of 10.2. The daily estimate has moved well above that since.
The short score has climbed in parallel, reaching 71.7 as of September 28, up from 67.4 two weeks earlier.
Put/call ratios have eased slightly even as borrowing tightened. The PCR stood at 2.19 on September 29, down from around 2.84 a week prior and below its 20-day mean of 2.56. The z-score is -1.31, placing it on the lower side of recent readings. Options positioning, in other words, has not amplified the borrow squeeze.
B of A Securities lowered its price target to $36 from $39 on September 29, maintaining an Underperform rating. That sits below the current price of $32.76. Wells Fargo holds the other end, with an Overweight rating and a $48 target. The consensus average sits at $47.67, roughly 46% above the current level. The stock is down 25% over the past month.
Next earnings are scheduled for November 13, 44 days out. With the borrow market this tight and short interest still building, that date gives the current positioning a defined timeline.
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