Pershing Square Inc. fell 9.5% on September 29, its sharpest single-day drop in months. The lending market remains severely stressed, even as a brief flicker of availability returns.
Yesterday's previous convergence report noted the borrow market hitting extreme conditions. The data has shifted slightly but the picture is not materially better for short sellers.
Availability, the ratio of shares still available to borrow against shares already lent out, stood at 13.5% as of September 29. That is a dramatic improvement from 0.02% on September 25, when every share in the lending pool was effectively committed. But 13.5% is still critically tight: for every share available, roughly seven are already out on loan.
Cost to borrow sits at 253% annualised. It peaked at 278% on September 25, the highest level on record for this stock. The rate eased marginally through the back end of last week but remains eight times what it was on September 16.
Short interest jumped 83% in a week to 830,406 shares. That level has held flat since September 24, suggesting no new shorting has been added, but existing positions are expensive to carry at these borrow rates.
The stock has dropped 9.5% in a single session but is still up 27% over the past month. At $53.56, it remains well above where every covering analyst has set a target. Wells Fargo's Equal-Weight target is $36. Tigress Financial is Neutral at $41. Jones Trading, which downgraded to Hold on September 29, offered no new target.
The consensus is Hold. Nine of ten analysts hold that view. The one Buy rating is the remnant of a position that has not yet been updated.
The put/call ratio on September 29 was 1.58, up from below 1.0 just a week prior. The 20-day average is 1.32. Options positioning has shifted toward puts over the past week, consistent with hedging activity as the stock came off its highs.
The ORTEX short score sits at 66.1, up from 61.3 on September 17. The score was in the low 60s through most of September and moved decisively higher as cost to borrow spiked and availability collapsed. A score in the mid-60s places PS in elevated-risk territory within the asset management peer group.
Availability is recovering from near-zero levels but remains far below normal. Cost to borrow above 250% makes any sustained short position expensive to hold. Watch whether availability continues to recover toward 30% or above, and whether the September 29 price decline represents a settling or the start of something sharper.
Data summary
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