Wolfspeed has handed short sellers a brutal week. The stock rallied 68% in five days after an earnings beat — while short interest climbed to 62.2% of free float.
That combination — a massive short base meeting a violent rally — puts the lending market under maximum strain.
Availability is at 0%. Every share in the lending pool is currently lent out. That's been the case for most of the past six weeks: the utilization history shows 100% on 22 of the last 30 trading days.
There are no fresh borrows to be had. Short sellers who need to add or maintain positions cannot source new shares. Those already short face a progressively harder exit if the rally continues.
Cost to borrow rose 88% over the past month to 3.0% APR. That's still a modest carry cost in absolute terms — but the direction matters. A borrow market at zero availability with rising cost signals that demand for shorts is outpacing any new supply.
Short interest hit 62.2% of free float as of May 6. That's up 55% in one month in share terms — short sellers were aggressively adding into what they expected to be continued weakness.
The earnings result inverted that thesis. Wolfspeed's post-earnings print triggered a 19.9% single-day move. The stock has now nearly tripled off its recent lows over the past month, gaining 146%.
Short sellers who added in April are deeply underwater. The ORTEX short score sits at 75.4 — ranking in the top 2% of all stocks by short-side pressure. The DTC rank is 4th percentile, meaning days-to-cover is among the shortest in the market relative to peers.
The put/call ratio hit 0.98 on May 6 — the highest in 52 weeks and a z-score of 2.94 standard deviations above the 20-day mean of 0.51. Options positioning has swung sharply defensive since mid-April, when the PCR was below 0.40.
This is notable in both directions. It could reflect short sellers hedging via puts. It could also reflect longs protecting gains after a 68% week. Either way, the options market is pricing in far more downside protection than at any point in the past year.
T. Rowe Price added 4.6 million shares as of Q1 2026 — bringing its stake to 13.7% of shares outstanding. Morgan Stanley added 2.4 million shares. Citigroup, which is also a 10% owner, built a new position of 2.8 million shares.
The CEO sold $1.1M worth of stock on May 1 — just before the earnings rally. That's one data point, not a pattern.
Key data — May 6, 2026:
See the live data behind this article on ORTEX.
Open WOLF on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
