Short Sellers Pile In as Earnings Season Bites

Short interest built sharply across several US names this week, with micro-cap and mid-cap stocks seeing the most aggressive moves. Borrow costs hit extreme levels in a handful of tickers, while ETF shorts retreated. Convergence signals flagged a busy week of analyst-driven short positioning, particularly in PS, STZ, and LDOS.

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Top Movers

WHK saw the largest percentage jump of the week. Short interest surged 227% in seven days to 843,352 shares. Borrow cost eased slightly to 5.52% from 5.86%, suggesting supply is not yet constrained.

BUUU short interest rose 222% to 28,195 shares. Cost to borrow sits at 232% annualised, up from 181% a month ago. That borrow cost level signals a severely limited share supply.

ARI short interest climbed 45% in a week to 5.47% of free float, with 7.6 million shares now shorted. Borrow cost rose 11% week-on-week to 1.02%. Availability fell 34% to 223%, pointing to tightening supply as liquidation fears build.

PLNT short interest jumped 26.5% to 11.2% of free float. That is the highest reading since October 2024. No borrow cost escalation accompanied the move, indicating shorts are finding shares relatively easy to locate.

CCC short interest rose 24% to 9.65% of free float, the highest since early October. The stock rallied 16% on earnings optimism during the same period. Shorts are building into strength.

FIVN short interest increased 20.9% to 12.1% of free float, the highest since early September. The move came despite analyst upgrades and a reported $100 million contract win. Short sellers are pushing back against the positive news flow.

DECK short interest climbed 20.6% to 8.2% of free float, up from 6.8% a week ago. Borrow cost fell 14% to 0.37% and availability remains ample at 880%. The positioning increase is not yet creating borrow pressure.

On the other side, QQQM short interest fell 37% to 0.45% of free float, near multi-month lows. ETF demand has remained robust, and macro hedges via this vehicle appear to be unwinding. EIS short interest dropped 21% to 2.9% of free float, with borrow cost easing to 0.27%.

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Sector Themes

The week's 1,137 pulses spanned a wide range of names without a single GICS sector dominating. That said, several patterns stand out across the data.

Hospitality and leisure shorts built. H (Hyatt Hotels) short interest rose 21% to 13.4% of free float, the highest since early October. PLNT saw a similar move. Both names carry elevated short positions heading into earnings season.

Consumer discretionary and retail saw mixed flows. DECK shorts increased. CCC shorts built into a rallying stock. FIVN saw short interest rise despite good news.

Macro ETF shorts retreated. QQQM and EIS both saw meaningful short interest declines. Broad market hedges via ETFs appear to be coming off as earnings season opens with generally positive results.

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Convergence Watch

Several tickers saw short interest data align with analyst actions and options activity this week, creating high-conviction signals in either direction.

PS generated two separate convergence alerts. Citigroup cut the stock to Sell as three bearish data points aligned simultaneously. Separately, short interest jumped 183% with borrow cost hitting 241% annualised. Both signals point in the same direction.

STZ (Constellation Brands) appeared in three convergence alerts. Short sellers kept building positions even as the stock bounced. JP Morgan raised its target price. Warren Buffett trimmed his stake. The tug of war between rising shorts and analyst support is unresolved.

LDOS attracted a fresh convergence flag as JP Morgan joined what the data describes as a crowded table of bears.

ASTS saw Deutsche Bank upgrade the stock into a position where short interest is already elevated. That analyst-versus-short divergence is a classic setup to watch into earnings.

CRM saw a Bank of America rating reversal trigger short covering. The convergence flagged what appears to be a short capitulation event following the analyst U-turn.

REGN (Regeneron) saw UBS upgrade to Buy as short sellers retreated ahead of the company's earnings print. Borrow market conditions eased alongside the positioning reduction.

QUBT borrow market was flagged as exhausted, with the short score hitting 84.8. When borrow availability is this tight, further short accumulation becomes mechanically difficult regardless of the bear thesis.

TXRH (Texas Roadhouse) saw Jefferies upgrade the stock as shorts piled in ahead of earnings. Options and short data are pointing in opposite directions ahead of the print.