Wearable Devices Ltd. is digesting a dramatic four-week short positioning cycle — shorts that piled in hard through late April are now retreating, and the borrow market is rapidly loosening after what was briefly one of the most punishing lending environments in the stock's recent history.
The short interest story here is genuinely striking because of the shape of the move, not just the level. SI as a percentage of the free float hit 26% on April 21 — a near four-fold jump from the roughly 6-7% readings seen at the start of April. Cost to borrow followed in lockstep, exploding from under 10% APR in early April to a peak of 236% on April 24, making fresh short positions almost prohibitively expensive to hold. Availability collapsed in parallel: by April 21 it had dropped to just 26%, meaning barely one share remained available to borrow for every four already lent out. That configuration — high SI, near-zero availability, triple-digit CTB — is the hallmark of a short squeeze setup.
The retreat since then has been swift. Shorts have unwound sharply: SI has fallen from that 26% peak back to 9.9% of the float, still elevated relative to early April but less than half the crisis-week level. Cost to borrow has dropped from 236% to 21%, a still-elevated but no longer extreme level. Availability has widened back to 172% — more than enough supply to support new shorts if they choose to return. The normalisation is real, but the pace matters: most of the squeeze appears to have run its course in a matter of days.
The price action tells an incomplete story. WLDS closed at $0.99 on May 12, down 3.8% on the week and down 30% over the past month. That month-over-month decline coincides almost exactly with the period when short pressure was at its most intense, suggesting the stock absorbed meaningful selling even as shorts were paying extreme borrow costs to maintain positions. The stock's micro-cap stature — market cap around $2.9 million — amplifies every positioning swing, meaning relatively small changes in shares short translate into dramatic percentage moves in the float.
Armistice Capital remains the largest institutional holder on record, with roughly 313,000 shares (about 8.9% of shares outstanding) as of March 11, following a large addition. That single name accounts for the majority of institutional positioning — the holder list is thin, with just 16 names on record. The ORTEX short score of 67.3 is elevated, ranking in what is still a meaningful range after pulling back from the low-80s seen at peak short pressure in late April and early May. The days-to-cover rank of 88 is the standout factor score, reflecting how quickly shorts can overwhelm available liquidity in a name this small.
Earnings are next due in September. The prior four prints have mostly been negative: the stock fell 6.9% and 13.6% on the day of the two most recent results, with five-day follow-through losses exceeding 21% in one case. What to watch is whether SI continues its retreat toward the early-April baseline of 6-7%, or stabilises here — any signs of renewed short-building in a name where availability can tighten this quickly would recharge the squeeze dynamic almost immediately.
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