SK Telecom Shorts Retreat Sharply as Borrow Supply Surges Before Q3 Print

SKM short interest has more than halved over six weeks, and the borrow market has swung from moderately tight to exceptionally loose, a combination that reframes the positioning story heading into the November 4 earnings release.

The most striking number in the data is the availability reading. Shares available to borrow now stand at 3,800% of current short interest, meaning there are roughly 38 shares sitting unborrrowed for every one that is currently lent out. That is the loosest the borrow pool has been in well over a year. As recently as mid-October, availability was below 500%, and in late September it was closer to 260%. The reversal has been rapid: borrow supply ballooned as the short position itself unwound. Short shares outstanding fell from around 3.4 million at the end of September to roughly 1.5 million by October 29, a drop of more than 55%. Cost to borrow has stayed low throughout, now at 0.50%, down 15% on the week, confirming this is a structural reduction in short demand rather than a squeeze-driven exit.

The ORTEX short score corroborates that shift. It has fallen from 33.3 on October 19 to 28.1 on October 29, moving in the direction that reflects reduced short-side pressure. The score's percentile rank for the broader market puts SKM at the 89th percentile for low short positioning, meaning fewer stocks in the universe carry a cleaner short-side picture right now. Availability rank sits at the 91st percentile. Options positioning is calm rather than defensive. The put/call ratio of 0.28 is barely above its 20-day average of 0.27 and about one standard deviation above that mean. That is far from the 52-week high of 1.11 and suggests options traders are not rushing to hedge ahead of the print.

The stock itself has been weak. SKM closed at $30.28 on October 30, down 16% over the past month. That decline came even as the short position was being cut, which removes one obvious explanation for the selling. The company reported stronger-than-expected Q2 earnings in August, driven by 5G subscriber growth and margin expansion, and raised full-year guidance at that point. The August print saw the stock fall 6.7% on the day before recovering over the following five sessions. Wellington Management, which had held more than 5% of the class as recently as May, filed a 13G/A in August disclosing a reduction to 1.5%, a significant exit by a notable institutional name that may have contributed to the overhang. SK Inc. remains the anchor holder with 30.8% of shares, and the National Pension Service added 3.8 million shares as of late July, a counterweight to the Wellington exit.

The November 4 print will test whether the guidance lift from Q2 has translated into Q3 numbers that justify a re-rating, or whether the 16% monthly price decline reflects something more fundamental than positioning noise.