Gladstone Investment Corporation reports its latest results today with bears notably on the back foot — short sellers have slashed positions by nearly half in a single week, handing the stock a cleaner runway into the print.
The retreat in short interest has been dramatic. Estimated shares short collapsed 48% in just one session on May 11, and fell an almost identical amount over the trailing week, to around 603,000 shares. That unwind continues a trend running through much of April, when short interest was more than three times higher at roughly 2.1 million shares. Alongside the covering, borrow availability has loosened considerably: availability climbed as short positions were returned to the lending pool, while the 52-week utilisation peak hit 91.7% back in early April — a period that now looks like the high-water mark for bearish conviction. Cost to borrow has also eased from its April highs above 7.9%, settling near 5.4%, though it jumped 58% in the past week, suggesting some residual demand for the short.
Options positioning tells the same bullish story. The put/call ratio is running at just 0.063, essentially flat with its 20-day average of 0.069 and nowhere near defensive territory. With a 52-week low PCR of exactly zero and a 52-week high of 2.42, the current reading is firmly in the call-heavy zone — options traders are not hedging into this print. The stock itself has gained 15% over the past month, closing at $16.92 on Tuesday, though it gave back a modest half-percent on the week, suggesting the monthly rally has paused rather than reversed.
The analyst backdrop offers a mixed picture. Oppenheimer's Mitchel Penn raised his target from $14 to $15 in February while maintaining an Outperform — meaningful because the stock has since traded above that target. The consensus price target of $13.90 now sits well below the current price, a gap that merits a caveat: the overall consensus appears stale (as of May 2025), and only a small number of analysts cover the name. What coverage there is has been cautious: Ladenburg Thalmann downgraded to Neutral in May 2025, and most of the smaller brokers circling the stock have clustered around Neutral ratings, pointing to a Street that recognises quality but questions valuation at current levels. The price-to-book multiple of roughly 1.05x and a PE near 27x frame the same tension.
Close BDC peers finished Tuesday solidly in the red — BBDC fell 2.9%, FDUS dropped 5.5%, and PFLT slid 2.0% — while GAIN added 2.6%. That divergence, alongside the sharp short-covering, makes today's print a test of whether the Gladstone investment portfolio can justify the premium it commands over both the peer group and the consensus target.
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