Stories are generated from ORTEX data and reviewed by the ORTEX team. How we publish
Citigroup cut SECZ to Neutral on Tuesday, even as the September borrow squeeze that defined the past month continues to unwind at speed.
Peter Christiansen at Citigroup moved his rating from Buy to Neutral but raised his price target to $14 from $10. The stock closed at $11.86 on Monday, so the new target still implies 18% upside. Elsewhere on the Street the tone is more constructive: StoneX raised its target to $18 from $12 while keeping Buy, and Citizens lifted its target to $17 from $15. The consensus sits at Buy, with a mean target of $15.66.
The lending data tells a clear story of normalisation. Cost to borrow peaked at 133% on September 21. It has since fallen to roughly 12%, a level consistent with where it traded through most of August and early September.
Availability, which hit 0.06% on September 21 (effectively zero shares left to lend), has recovered to 27%. That is still a tight market by historical standards, but it is a long way from the acute constraint that defined the squeeze. Short interest has fallen in step: estimated shares short dropped from 9.9 million at the September 25 peak to 6.1 million as of October 12, a 38% reduction. The ORTEX short score has eased from 74.6 in late September to 59.7, the lowest reading in the recent data window.
The previous ORTEX note, published October 8, described bears as having rebuilt positions even as borrow costs collapsed. Since then the position has continued to shrink. Short sellers appear to be exiting, not regrouping.
The Citigroup downgrade does not reflect the lending dynamics. It reflects the stock itself. SECZ fell 14% on October 12 alone and has risen only 1.4% over the past week after a 43% gain over the past month. That kind of volatility is consistent with the company's earnings history: the last four reporting events produced one-day moves of plus 16%, minus 29%, minus 23%, and minus 23%. The next earnings date is November 12.
The bull case centres on $4.59 billion of tokenized AUM across 23 blockchains, up from $82 million at end-2023, and a compliance stack that takes years to replicate. The bear case points to only $9.60 million of remaining performance obligations at June 30, lumpy revenue, and a market share in tokenized real-world assets that fell from 27% in July 2025 to 12% by mid-September 2026 even as the overall market grew.
ORTEX forecasts a 67% probability that SECZ joins the MSCI World IMI, MSCI USA IMI, and MSCI USA Small indices at the November 2026 quarterly review. The rank date is October 19. If confirmed on November 11, index trackers would need to buy an estimated $71 million of stock, equivalent to roughly two days of normal volume, with the trade date set for November 30. That is a forecast, not an announcement. The stock is currently 52.7% above the entry price threshold of $5.62, so qualification is not in question at current levels.
Blockchain Capital holds a Schedule 13D stake of 6.0% as last disclosed on July 9, and co-founder Carlos Domingo filed a separate 13D at 5.4% on the same date. Both positions are as last disclosed; holders dropping below 5% may exit without a further filing.
What to watch: whether short interest stabilises around 6 million shares or continues falling ahead of the November 12 earnings date, and any follow-through from other analysts on the Citigroup downgrade.
See the live data behind this article on ORTEX.
Open SECZ on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
