RSI Falls 18% in a Month, Yet Short Sellers Are Piling In

Rush Street Interactive reports Q3 results on October 28, down 18% over the past month to $16.30, while short sellers have added materially to their positions and a wave of analysts have trimmed targets in the days immediately before the print.

The clearest signal right now is in short interest. Bearish bets have climbed 27% over the past month, reaching 10.2% of the free float, a level that qualifies as genuinely elevated for a mid-cap gaming name. The move happened in a fairly tight window: positions jumped from roughly 8.9 million shares in early October to just under 10 million by mid-month. Despite that build, the borrow market remains loose. Availability is running at 771% of short interest, meaning there are nearly eight shares available to lend for every one already borrowed, and cost to borrow is only 0.42%. That combination, high short interest but ample borrow supply, suggests the position is a considered bet rather than a technically squeezed one.

Options tell a different story at the margin. The put/call ratio of 0.31 sits above its 20-day average of 0.24, roughly 1.65 standard deviations elevated, but remains low in absolute terms and nowhere near the 52-week high of 4.55 reached earlier in the year. Options traders are hedging more than they were two weeks ago, but the overall skew is still call-heavy. That divergence between a crowding short position and a relatively optimistic options market is the tension going into the print.

Analysts have moved sharply and consistently in one direction. JP Morgan cut its target from $30 to $22 on October 20, keeping a Neutral rating. Morgan Stanley initiated at Equal-Weight with a $22 target on October 19. Both moves came within the past week and set a cautious tone from two bellwether firms. Stifel and Freedom Capital Markets also trimmed targets to $30, while Barclays initiated at Overweight with a $24 target on October 23, the lone constructive new voice in the cohort. The mean consensus target of $31.71 implies substantial upside from $16.30, but the direction of travel for individual targets has been uniformly downward. The bull case rests on 66% gross gaming revenue growth in fiscal 2025, a strong Latin America footprint, and $336 million in cash. Bears point to state-level operator caps compressing market share, rising technology costs, and reliance on third-party content agreements.

One item on the register stands out. Neil Bluhm holds a Schedule 13D activist stake, last disclosed at 46.5% of the class, down from 77.0% previously. A 13D filer signals active engagement rather than passive ownership, and Bluhm's stake represents the dominant position in the company's structure. Separately, insiders net sold roughly $14.8 million worth of stock over the past 90 days, the largest transactions being CEO Richard Schwartz and CFO Kyle Sauers, both acting under pre-arranged 10b5-1 plans. Planned sales carry less signal than discretionary ones, but the net direction is consistent with the broader tone. BlackRock, meanwhile, roughly doubled its reported stake to 13.3% as of its last filing, making it the largest institutional holder by a wide margin.

The company's last earnings release, in late July, produced a 12.8% single-day decline and a 15.5% drop over the following five days. Tuesday's print will test whether the recent analyst target cuts and the sharp rise in short positioning reflect a genuinely deteriorating revenue outlook, or whether the stock's 18% one-month slide has already absorbed the bad news.