DAIC (CID HoldCo, Inc.) arrives at its May 11 earnings report in an unusual position for a micro-cap software name: short sellers who piled in aggressively just weeks ago are now quietly unwinding.
The sharpest signal from the lending market is how quickly the bearish conviction built — and then receded. Short interest exploded more than 500% between mid-April and late April, jumping from around 52,000 shares to a peak of roughly 370,000 by April 30. Since then, the position has shrunk about 25% to 278,000 shares. The retreat has eased borrow pressure: cost to borrow is running near 30%, down sharply from a spike above 44% on April 28. Availability, at over 2,600% of short interest, is exceptionally loose — the lending pool is far from stressed — suggesting the aggressive short-build was a tactical bet rather than a structural view.
That timing matters. The surge in shorts coincided almost precisely with a April 23 filing disclosing a prospectus for the potential sale of up to 51 million new shares — a substantial dilution risk for a company with a market cap under $6 million. Bears moved fast; they are now moving back out. The stock has lost about 8.5% over the past week and trades near $0.19, which itself reflects the dilution overhang still sitting in the background.
The ORTEX short score of 41.6 — and a days-to-cover rank in the 91st percentile against the universe — tells a nuanced story. The DTC rank is elevated, meaning it would take relatively long to unwind the remaining short position versus daily trading volumes. But utilization is a mere 5%, meaning the vast majority of lendable shares sit idle. The disconnect between a high DTC rank and loose availability points to a stock where the absolute short position is small but trading liquidity is thinner still.
Past earnings prints have been unkind. Three of the four events on record produced negative first-day moves, including a severe 47% drop on December 26, 2025. More recent prints in early March 2026 saw the stock fall 3-4% on the day. The May 11 report will test whether the dilution filing has already been priced into the current sub-$0.20 level — or whether the market finds additional reasons to revisit the lows.
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