Versus Systems is flashing contradictory data in its lending market. Short interest collapsed 94% in one week — yet availability has virtually disappeared.
Shares short fell from 74,702 on April 16 to just 4,391 by April 24. That is a 94% drop in eight days. Cost to borrow followed, falling 60% to 1.66% from 4.16% the prior week. On the surface, that looks like a clean exit by short sellers.
The ORTEX short score confirms the retreat. It dropped from 53.4 on April 16 to 36.3 by April 24. Bearish positioning has clearly unwound.
Here is where it gets unusual. Despite the sharp reduction in short interest, availability has tightened dramatically. As of April 27, the lending pool is nearly exhausted — availability has dropped to its tightest level in 52 weeks.
In normal conditions, fewer borrowed shares means more supply available to new borrowers. Here, the opposite is happening. The remaining 4,391 shares short are absorbing almost all the stock available to lend. That means the lending pool itself has shrunk dramatically alongside the short interest — very little inventory remains for any new position.
VS closed at $1.31 on April 27, up 12.9% on the day and 10.7% over the past month. The price gain coincides with the short interest unwind. Shorts exited as the stock rose.
The most recent earnings event on April 15 saw the stock move 8.4% on the day. That appears to have triggered the initial short position spike — shares short jumped from 11,248 on April 15 to 34,123 on April 17, then peaked at 74,702 on April 16 before the mass exit.
The divergence between near-zero short interest and near-zero availability is the key signal here. Any new bearish positioning would immediately face an extremely tight borrow market, with borrowing costs likely to spike sharply from the current 1.66%.
Data summary
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