Virgin Galactic heads into its May 14 earnings report carrying one of the most heavily shorted positions in the entire market, even as the lending pool has loosened and options traders lean conspicuously bullish.
Short interest has become the dominant story here. At 36.1% of the free float — up 30% in a month and 14% in the past week alone — SPCE ranks in the bottom percentile of the market on short positioning, with an ORTEX short score of 77.2. The official FINRA settlement data corroborates the scale: 21.9 million shares short as of April 30, with days to cover at 2.66. What makes the setup less straightforward is the direction of borrow costs. Cost to borrow has dropped sharply — from above 24% in early April to roughly 10% now, a 56% fall over the month. Availability has also loosened off its most extreme levels. That combination means short sellers are paying less to maintain positions than they were, even as the total position has grown — a bearish bet that is getting cheaper, not more expensive, to hold.
Options tell a different story. The put/call ratio has dropped to 0.31, more than two standard deviations below its 20-day average of 0.33 — near the lowest reading of the past year and pointing to call-side demand that is unusually strong. That is the most striking divergence in the setup: a third of the float is short, yet the options market reflects aggressive bullish positioning heading into the print. The stock itself is up 14% on the week but still down 8% over the past month, closing at $2.79.
The analyst community is largely sidelined and mixed. Jefferies maintained its Buy rating in early April but trimmed its target to $5.00 from $8.00 — still the most constructive view on the Street. Susquehanna is Neutral at $3.00, and Morgan Stanley holds an Underweight rating at $2.30. The mean target sits at $3.61, implying modest upside to the current price, but the direction of travel across recent actions has been target cuts, not raises. Note that some older Goldman Sachs data in the record reflects pre-reverse-split price levels and should be treated as stale.
The earnings print will test whether the company can offer any clarity on its commercial trajectory — and whether call buyers or the short base has read the setup correctly.
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