Galaxy Digital bounces 9% but short sellers keep adding

Galaxy Digital Inc. just put in its best week in months, yet the short position keeps growing.

Short interest climbed to 18.4% of the free float by October 27, with roughly 35.4 million shares borrowed against the stock. That is up 7.3% over the past week and 17.6% over the past month, the highest level in at least a year. FINRA's most recent official count, settled October 15, confirmed 34.6 million shares short with 5.8 days to cover. The ORTEX short score has risen to 72.2, the top of its recent range, placing GLXY in the bottom 5% of all stocks by this measure. Short sellers have not flinched despite the stock closing at $17.18 on October 27, a 9% gain on the week.

The borrow market has tightened noticeably this week, which sharpens the story. Availability has dropped to 96% of short interest, down from 157% a week ago, meaning the lending pool is significantly tighter than it was. A week ago there were roughly 1.6 shares available for every share borrowed. Now the ratio has nearly reached parity. Cost to borrow remains low at 0.57%, up about 5% on the week, so the tightening has not yet translated into meaningful friction for short sellers. The put/call ratio has swung hard in the opposite direction: at 0.40, it is more than two standard deviations below its 20-day average of 0.50, the most call-heavy reading in months and close to the 52-week low of 0.30. Options traders are positioned for further upside even as short sellers add.

The analyst community has been cutting targets while keeping positive ratings. Rosenblatt trimmed to $30 from $35 on October 26, Maxim Group cut to $36 from $46 on October 22, and Piper Sandler moved to $25 from $33 on October 20. All three maintained Buy or Overweight ratings. The mean price target across the desk is $36.28, more than double the current price. Citigroup added a constructive note to the mix on October 13, upgrading to Buy with a $28 target. The bull case centres on the data centre buildout, with all 133 MW of Phase 1 capacity in service and the HPC contract underwriting much of the near-term revenue line. The bear case points to crypto-price sensitivity, execution risk on the power pipeline, and regulatory uncertainty. The EV/EBITDA multiple has contracted sharply, falling more than 7 points over the past 30 days to 20.3x. Price-to-book has also pulled back, down 1.3 points over the same period to 3.8x.

Ownership tells a broadly constructive story. Capital Research holds 9.4% of shares, FMR 8.5%. BlackRock added over 4 million shares in the quarter ended September 30, bringing its position to 5.1% of shares outstanding. State Street and Geode both added meaningfully over the same period. CEO Michael Novogratz retains 49.9% of the company per the most recent 13G/A, filed in February, down from 53.5% previously. No 13D activist is on the register. The most recent open-market insider activity, two director purchases in August totalling roughly $358,000, predates the recent price decline and carries limited read-through at current levels.

GLXY gained 9% on the week while most of its closest peers fell. HOOD dropped 3.7%, COIN fell 5.7%, and BKKT shed 7.3%. Wikipedia attention for Galaxy Digital has spiked to 2.8 standard deviations above its own 90-day average as of October 23, the highest retail attention reading in the recent data. The next earnings event is scheduled for November 5. With short interest at a year high, availability tightening fast, and options traders positioned for gains, the gap between those two camps is the number to watch into that release.