Galaxy Digital shorts hold firm as shares shed a fifth in a week

Galaxy Digital Inc. has shed 20% in a single week, and short sellers are not running for cover.

Short interest in GLXY is running at 17.1% of the free float, backed by roughly 33 million shares short. That is a meaningful level for any stock, and the 30-day trend points the wrong way for longs: SI has grown around 9.4% over the past month, even as a brief pullback this week trimmed it fractionally from its recent peak. FINRA's most recent official count, using the September 30 settlement date, showed 32.6 million shares short with days-to-cover of 6.73, consistent with the daily estimate. The short score sits at 70 out of 100, a level that has held relatively steady over the past two weeks after briefly touching 72 in mid-October, placing Galaxy in the bottom 6% of stocks by this measure. Borrow conditions are far from panicked, though. Availability has actually loosened over the past week, rising to 141% of short interest, meaning lenders have roughly 97 million shares available against the estimated 33 million borrowed. Cost to borrow is a modest 0.55%, up around 13% on the week but still low in absolute terms. The short position is large; the squeeze mechanics are not.

Analysts see a very different stock from where it is trading. Ten of eleven covering analysts rate GLXY a buy, with a consensus mean price target near $40 against Tuesday's close of $15.76. That gap deserves scrutiny. Piper Sandler cut its target to $25 from $33 on October 20, maintaining Overweight. Morgan Stanley lowered to $43 from $48 in mid-October, also keeping Overweight. Citigroup moved the other way, upgrading to Buy and raising its target to $28. The direction of travel among most analysts is lower targets, even if ratings are staying constructive. The bull case rests on Galaxy's dual-engine model: recurring digital assets revenue from trading, lending, and asset management on one side, and a data centre platform with 830MW of approved gross power capacity on the other, giving exposure to both crypto adoption and AI infrastructure demand. Bears point to the sensitivity of revenues to crypto prices and trading volumes, noting that the average loan book fell to $1.4 billion from $1.8 billion and industry trading volume dropped more than 25% in the last reported quarter.

Options positioning offers no strong directional read. The put/call ratio is 0.52, slightly below its 20-day average of 0.54 and well within one standard deviation, sitting near the middle of its 52-week range. There is no unusual hedging demand visible from options, despite the sharp price decline.

The ownership picture is dominated by Galaxy's founder and CEO, Michael Novogratz, whose 13G/A filing in February disclosed a 49.94% stake, down from 53.48% previously. No 13D activist is on the register. Among institutional holders, BlackRock added over four million shares as of September 30, bringing its reported holding to around 5.1% of shares. State Street and Geode Capital also added material positions in the same period. Capital Research holds 9.4% and FMR around 8.5%, though both figures are from mid-year filings. The Vanguard Group filed a 13G/A in March disclosing a zero position, having previously held 10.74%, while a separately named Vanguard Capital Management entity filed its own 13G showing a 5.1% stake, reflecting the restructuring of Vanguard's entity structure. Insider activity over the past 90 days shows a small net negative: the CLO conducted planned 10b5-1 sales in September, while two directors made open-market purchases in August at prices between $19.63 and $21.54, materially above where the stock trades now.

Wikipedia attention for Galaxy Digital registered a z-score of 2.6 against its own 90-day history as of late September, the highest retail attention reading available in the data. That was recorded when the stock was still trading above $24. Earnings are due October 27, six days away. The last two reports produced sharp negative reactions: the stock fell 11.7% on the day in August and 19.6% on the day in July, though both recovered partially within five days. With short interest near its highest level in months, borrow availability ample, and targets clustering well above the current price, the October 27 print is the next hard data point for both sides of this trade.