ADAM shorts jump 42% in a week ahead of earnings

ADAM heads into its October 29 earnings print with short sellers notably more active than they were a week ago, even as the broader lending market remains loose.

The most striking positioning move is in short interest, which jumped 42% across the past week to 3.8% of the free float. That is not a crowded short by any measure, but the pace of accumulation is unusual for a mortgage REIT of this size. Despite that, the borrow market shows no stress: availability runs at roughly 799%, meaning there are nearly eight shares available to lend for every one already borrowed, and cost to borrow is a negligible 0.50%. Short sellers face no squeeze pressure heading into the print.

Options positioning has also shifted more cautious over the same window. The put/call ratio has climbed to 0.26, above its 20-day average of 0.21 and approaching a one-standard-deviation move above the mean. That is nowhere near the 52-week high of 0.31, but the direction of travel since mid-October is clear: put demand has picked up as shorts accumulated, with the PCR roughly doubling since late September. The stock itself is down 4% over the past month to $7.78, though it recovered 4.6% on the week.

There is also an index angle worth watching. ORTEX's Index Rebalance Radar puts a 57% chance that ADAM is deleted from the S&P SmallCap 600 at the December 2026 Quarterly Review. The exit price that flips the rule is $6.68, about 15% below current levels. At $699M in market cap, ADAM sits comfortably above the band for now, but the forecast flow on a deletion would be roughly $110M of selling pressure, equivalent to 13.6 days of normal volume. In 87 comparable past deletions, 59% of names moved the expected way, with a median decline of 4.8% from announcement to effective date.

The ownership register adds one more layer. Howard Amster, who filed a Schedule 13D on ADAM in early 2025, trimmed from 5.7% to 4.9% in an amendment filed August 25, dropping just below the formal disclosure threshold. As of that last filing, he held 4.38 million shares. Schedule 13D stakes are event-driven disclosures around the 5% line, and a holder who falls below it may not file again. BlackRock remains the dominant holder at over 15% of shares. The earnings report will test whether the recent short accumulation reflects concern about the underlying mortgage book, or simply pre-print hedging from investors mindful of both the index rebalance risk and a one-quarter track record of a 4.9% single-day gain after the last print.