TPG Short Interest Climbs 25% in a Month, Borrow Stays Cheap

Short sellers have added meaningfully to their positions in TPG in the run-up to Wednesday's earnings. Shares short have climbed 25% over the past month to roughly 14 million, putting short interest at 9.6% of the free float, one of the more elevated readings in the alternative asset management peer group.

Despite that build-up, the borrow market tells a different story. Availability is at 1,121% of short interest, meaning lenders hold more than eleven shares available for every one already borrowed. Cost to borrow is just 0.52%, down from already modest levels a month ago. The borrow market is loose. There is no friction that would make holding or adding a short position expensive, which suggests the short interest build reflects a considered view on the stock rather than mechanical pressure.

The stock itself has held up. TPG closed at $44.82 on Monday, up 4% on the week, roughly in line with close peers CG and KKR, though BX pulled ahead with an 11% weekly gain and ARES added nearly 8%. The options market has eased its defensive tilt: the put/call ratio is at 2.28, about 1.6 standard deviations below its 20-day mean of 2.44, meaning traders have been less active in buying downside protection than they were through most of October.

Analyst sentiment is broadly constructive but has cooled at the margin. TD Cowen and Barclays both trimmed their price targets to $60 in early October while holding positive ratings. Wells Fargo initiated coverage at Equal-Weight with a $47 target, close to the current price. The consensus mean target of $57.65 implies around 29% upside from current levels. James Coulter, TPG's Executive Chairman, filed a Schedule 13D/A on August 18 disclosing a stake of 56.4% of the class, down from 58.3%, while Wellington Management has grown its holding to 11.2% of shares. Stakes are as last disclosed around the 5% threshold and holders falling below may not file again.

Wednesday's print will test whether the third quarter's fundraising and fee-earning AUM trends justify the gap between where the stock trades and where most analysts say it should.