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Short interest in Verastem dropped 20.3% in a single day on October 9, falling to 19.7% of free float. That is the sharpest one-day unwind in recent weeks, and it arrived as the stock rebounded 3.3%. Since the previous note on October 8, when short interest sat at 24.8% of float and appeared entrenched, the picture has shifted materially.
The scale of the move is notable. Estimated short shares dropped from around 19 million to just over 15 million in one session. On a one-week basis, short interest is now down 19.7%, erasing the 10.2% climb reported earlier last week. Bears who built positions through September and into early October appear to have used the price recovery as an exit.
The borrow market broadly supports that reading. Availability stands at 299%, meaning roughly three shares remain available to borrow for every two already lent. That is ample room for new shorts if conviction were high. The cost to borrow rose 75% over the past week to 0.54%, but that is still a low absolute level for a stock that has carried nearly a quarter of its float short. Rising cost alongside falling short interest points to a covering bid, not new supply entering.
The options picture has also calmed since Tuesday's pulse. The put/call ratio stood at 2.4 standard deviations above its 20-day mean on October 7, a reading that flagged elevated put buying. By October 9 the PCR had retreated to 0.21, only 0.76 standard deviations above the mean. The hedging pressure that briefly spiked has faded alongside the covering trade in the lending market.
Analyst consensus remains uniformly positive. BTIG reiterated its Buy rating and $18 target on October 8, the same day the short position was at its recent peak. HC Wainwright holds the same view. The mean price target across coverage sits at $15, against a current price of $8.38. Wolfe Research initiated at Outperform in September, adding another bullish voice.
Bears, in contrast, anchor their case on the distance between current fundamentals and the valuation assumptions needed to justify the stock. The bull thesis depends heavily on avutometinib plus defactinib label expansion beyond the roughly one-third of KRAS-mutant ovarian cancer patients currently addressed, plus execution on the VS-7375 programme across multiple registrational trials. Earnings are due November 6, giving both sides a near-term checkpoint.
The ORTEX short score has eased to 64.7 from 67.3 a week ago, consistent with the fall in short interest. Insider sales in recent weeks were all executed under pre-arranged 10b5-1 plans and carry limited informational weight.
What to watch: whether the 19.7% short interest level holds into the November 6 print, or whether shorts rebuild as the stock approaches the $9 range.
See the live data behind this article on ORTEX.
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