General Dynamics reports tomorrow. Short sellers are moving fast — and options traders are pushing back just as hard.
Short interest hit 1.10% of free float on April 27. That's a 26% jump in one week. It's the fastest accumulation since at least late March, and it's happening with earnings less than 24 hours away.
The borrow market is tightening in step. Cost to borrow reached 0.50% on April 27 — up 150% week-over-week. That's still a low absolute rate, but the speed of the move signals fresh demand for short positions, not routine rebalancing.
Shares shorted rose from roughly 2.36 million to 2.97 million in seven trading days. The build accelerated sharply on April 24, when borrowed shares jumped from 2.46 million to 2.82 million in a single session.
Despite the short-side activity, options traders are leaning bullish. The put-call ratio fell to 0.60 on April 27. That's 2.3 standard deviations below its 20-day mean of 0.64 — the most call-heavy positioning seen in over a month.
The PCR has held in a tight band between 0.63 and 0.65 for most of April. Monday's drop breaks that range decisively. Call buyers are paying up ahead of the print.
Last quarter's result landed with a 4.5% one-day drop. The quarter before that rose 3.6%. Analysts are watching two key areas: backlog conversion in the Marine and Aerospace segments, and margin progress on the G700 program.
Wells Fargo initiated coverage at Overweight in April with a $400 target. Jefferies and Citigroup both trimmed targets slightly in early April but held their ratings. The consensus target sits at $393 — a 26% premium to Monday's close of $312.53.
The stock is down 9.9% over the past month. CEO Phebe Novakovic sold over $11.6 million of stock in March. That predates the current price weakness.
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