AudioCodes stock dropped 16% on May 6. The options market had seen it coming — just not in that direction.
The put/call ratio told a clear bullish story heading into earnings. It collapsed from a 20-day mean of 5.40 to just 0.105 — a 52-week low sitting 2.6 standard deviations below the norm. Traders were buying calls at an extreme pace. The PCR had already hit 0.096 on May 4, its lowest point of the year.
Then AudioCodes reported on May 5. The stock fell 16% on May 6.
The options positioning was unambiguous. Calls dwarfed puts by nearly 10 to 1. That level of call dominance, against a 52-week high PCR of 7.08, marks a historic sentiment swing. It didn't pay off.
The lending market added a separate signal. Cost to borrow rose 136% in one week to 2.44%, the sharpest weekly move since late April. Yet the borrowing pool remains loose. Availability is wide — short interest sits at just 0.24% of free float, down 40% over the past month. There simply aren't enough short sellers in the stock to tighten supply meaningfully.
The CTB spike looks more like positioning noise than a genuine borrow squeeze. With shares short at around 68,300, the absolute level is small. Days to cover stands at 1.07.
Needham's Joshua Reilly reiterated a Buy rating with a $12.50 target as recently as May 2025. Barclays carries an Underweight with a $10.00 target. The stock now trades at $8.51 — below both targets, with the next earnings event not due until late July.
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