HLN shares in Haleon plc have hit a wall in the lending market. Every share available to borrow is now lent out. That is the backdrop heading into a May 15 earnings report.
Availability has dropped to 0%. The entire lending pool for HLN is exhausted. This is the tightest the borrow market has been in 52 weeks.
Cost to borrow has nearly doubled in a week. The rate jumped 94% to 1.65% annualised — up from 0.85% just seven days ago. That compares to a range mostly hugging 0.75%–1.00% through April.
Short interest is driving the demand. Shares short climbed 31.9% in a single week to 17.2 million. The one-day jump alone was 22.9%. Demand for borrows accelerated sharply from May 8 into May 11.
For most of April, utilisation held in the 70%–90% range. It crossed 87% on May 7. By May 8 it was at 99.4%. By May 11 it hit 100% — the ceiling.
The timing is pointed. HLN reports earnings on May 15, three days away. Past earnings reactions have been consistently negative. The last four events all saw a negative one-day move, ranging from -2.4% to -2.9%. The five-day moves were also negative in each case.
Short sellers appear to be positioning ahead of that event.
Major holders are broadly adding. BlackRock added 26.9 million shares in its most recent filing. Schroders added 35.8 million. Principal Global Investors added 23 million. The institutional bid and the rising short interest are running in opposite directions simultaneously.
Options positioning leans bullish by contrast. The put/call ratio sits at 0.086 — near the 52-week low of 0.035 and well below the 52-week high of 0.219. Options traders are not hedging heavily.
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