Texas Pacific Land Corporation heads into its May 6 Q1 report with short sellers growing more assertive — even as options traders move in the opposite direction.
The most notable shift in positioning is on the short side. SI has climbed nearly 8% over the past week to 18.2% of the free float, a meaningful acceleration that pushed the ORTEX short score to 59.2 — well into elevated territory. Days to cover now run at 14.5, meaning any forced covering would take more than two weeks at average volume. Yet the lending market tells a more relaxed story: cost to borrow has eased sharply to under 0.5%, down roughly 73% from levels seen in late March, and availability remains comfortable. Bears are building positions, but the borrow market is not yet signalling stress or a pending squeeze.
Options traders are less pessimistic. The put/call ratio has drifted to 0.49, more than one standard deviation below its 20-day average of 0.54 — close to its 52-week low of 0.47. That positions options flow as bullishly skewed heading into the print. The divergence between rising short interest and call-heavy options activity sharpens the debate: shorts are leaning on a 9% one-month price decline to $433.62, while options buyers appear positioned for a rebound. The last two Q4 earnings events each produced moves of roughly 13-14% on the day and around 16-20% over the following five sessions, so the market has reason to position aggressively in either direction.
The bull case rests on TPL's unique Permian Basin land position — a royalty-and-water-services model that generates high-margin revenue with minimal capital requirements. Analyst coverage is limited, but the most recent action of note (Keybanc in February, raising its target to $639 while maintaining Overweight) reflects the view that the land monetisation story has further to run at current oil activity levels. The stock trades at a PE of around 30x and EV/EBITDA near 20.5x — not cheap, and the valuation multiple has expanded roughly 2.3 points over the past month even as the price pulled back, which suggests earnings estimates may be drifting lower. Bears point to that compression: if royalty volumes or water services revenue disappoint, the premium multiple offers limited cushion.
One ownership angle worth noting: Horizon Kinetics — TPL's largest holder at ~14.5% of shares — has been buying in small daily increments throughout April, adding single shares at prices between $419 and $442. The purchases are individually nominal but the consistency is a signal of the firm's ongoing conviction rather than trimming into the decline. BlackRock added 471,542 shares as of March 31, a more substantial move by the passive-to-active spectrum.
The May 6 print will test whether TPL's royalty and water revenue held up against a softer oil-price backdrop — and whether the premium multiple survives contact with the actual numbers.
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