PDM Short Interest Hits One-Year High Before Earnings

Short sellers have added heavily to their positions in PDM over the past month. Short interest now stands at 7.6% of the free float, up 25% in 30 days, the highest level recorded in at least a year.

The build has been rapid. Positions were near 5.4 million shares at the start of October, then jumped to roughly 9.5 million shares by mid-month, where they have stayed. The official FINRA settlement data, as of October 15, puts short shares at 9.75 million with 7.55 days to cover. Despite the increased conviction from short sellers, the borrow market remains largely unconstrained. Availability is at 431%, meaning there are more than four shares available to lend for every share currently borrowed, well above the 52-week trough of 387%. Cost to borrow is 0.51%, low in absolute terms though it has risen 34% over the past week.

The stock has moved in the opposite direction to the shorts. PDM gained 7.5% over the past week, closing at $9.61, outpacing a median rise of around 5.3% across its closest office REIT peers. HIW added 4%, BXP rose 4.9%, and CUZ was up 4.5% over the same period. BDN was the only peer to meaningfully match the pace, gaining 12.2%. PDM is up nearly 5% over the past month.

The analyst consensus around PDM has been gradually lifting targets, though ratings remain cautious. JP Morgan raised its target to $11 in September, from $10, while keeping a Neutral rating. Baird followed a similar path after the last earnings report, moving from $9 to $10. Truist has maintained a Buy with an $11 target since June. The mean target of $10.50 sits about 9% above the current price, a modest premium that reflects the Street's view that the stock is fairly valued at best. Bears point to projected FFO declines running through 2026 and earlier dividend cuts as evidence of continued pressure on the balance sheet. The forward earnings yield factor ranks in the bottom quartile of the broader universe, and the EV/EBIT rank is in the 12th percentile, suggesting valuation support is thinner than it appears on a simple price-to-book basis.

The earnings report will test whether the rapid acceleration in short positions over October reflects genuine deterioration in the leasing or occupancy picture, or whether the covering that follows a strong week for the shares has already begun to run ahead of the numbers.