Chimera Investment Corporation enters the final day of Q3 with a bruising week behind it: the stock has fallen 8.5% in five sessions to $10.20, and short interest has nearly doubled over the past month.
The most striking development is the pace of short-side accumulation. Short interest climbed 82% over the past 30 days to 5.0% of the free float, with roughly half that gain coming in September alone. The week-on-week rise was 4.9%, and the daily estimate now shows around 4.2 million shares sold short. Borrow availability has tightened in tandem: availability dropped 21% on the week to 385%, down from above 1,100% in early September. That still leaves plenty of room in the lending pool, so there is no squeeze pressure building, but the direction of travel is clear. Borrowing costs have drifted higher too, rising 24% on the week to 0.52%, still comfortably low in absolute terms but tracking the shift in demand. The ORTEX short score reached 49.4 on September 29, its highest reading of the past two weeks, up from 43 on September 16.
Options positioning adds a contrasting signal. Call buyers dominate the tape in a way that is unusual relative to recent history: the put/call ratio collapsed to 0.25, more than one standard deviation below its 20-day average of 0.42 and touching its 52-week low. That is a notably bullish options skew against a backdrop of rising short interest and a stock down 11% over the past month. The two signals are pulling in opposite directions: short sellers are rebuilding positions, while options traders are leaning heavily toward calls.
The Street's view is broadly neutral but leaning cautious. Keefe, Bruyette & Woods cut their price target from $15 to $14 in August, maintaining a Market Perform rating after Q2 results disappointed. RBC Capital reiterated Sector Perform at the same $14 level in June. UBS holds the only Buy rating in the group, with a $14 to $15.50 target range established in late 2025. The consensus mean target is $14.17, roughly 39% above the current $10.20, though that gap partly reflects the stock's sharp decline since those targets were set. On valuation, the price-to-book has compressed to 0.59, down 7% over 30 days, and the PE multiple has contracted to 5.0 times earnings. EPS surprise ranks in just the 11th percentile of the universe, suggesting results have consistently disappointed relative to expectations.
The sector context matters here. Peers had a rough week too: MFA Financial fell 6.5%, AGNC dropped 6.3%, and MITT was off 7.3%. CIM's 8.5% decline edges out most of them, continuing a pattern of underperformance documented in prior notes: CIM is down roughly 17% year-to-date against a sector facing rate-driven headwinds. BlackRock is the largest reported holder at 9.4% of shares, having added nearly 700,000 shares in the period ending August 31. Thornburg holds 6.6%, broadly steady. Vanguard Capital Management crossed the 5% threshold and filed a fresh 13G as of July 31. None of these are activist positions; all three are passive or quasi-passive mandates. Under SEC 13D/G rules, stakes are as-last-disclosed around the 5% threshold, and holders who fall below that level may not file again.
The company's Q2 earnings print in early August saw the stock fall 6.3% on the day and a further 0.2% over the subsequent five sessions. The next earnings event is scheduled for November 4, and the setup heading into that date is whether the options market's bullish skew reflects genuine conviction or simply a cheap dividend-capture trade on a stock the short side is increasingly betting against.
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