DSS, Inc. heads into the week after its Q1 print with short sellers retreating from a month-long build — but the fundamental picture doing nothing to encourage them to stay away for long.
The headline this week is the sharp unwind in short interest after what had been a dramatic build. Short interest climbed from roughly 1.4% of free float in mid-April to a peak of 6.1% by late April — a more than fourfold increase in under two weeks. That spike was driven by an S-1 filing that spooked the float. Then, on May 8, the company disclosed a going concern warning in its 2025 annual report, and the stock took another leg lower. Since that moment, shorts have been covering aggressively: SI % FF has fallen from 5.4% on May 8 to 3.3% on May 14 — a 38% drop in shares short over the week. The stock itself is off 40% over the past month and trades at $0.52, so covering here looks less like conviction and more like locking in gains.
The lending market tells a similar story of easing tension. Cost to borrow has collapsed — from a peak above 6.6% in mid-March and above 4.6% in late March to just 1.1% now, the lowest level of the year. That is a dramatic softening of borrow pressure. Availability has loosened alongside it. The ORTEX short score, which hit 58.8 on May 8 at the height of the short build, has since pulled back to 52.2 — still above the midpoint, but no longer flashing extreme stress. With borrow cheap and availability no longer constrained, the structural setup for a short squeeze is absent. Shorts are leaving on their own terms.
Fundamentals give them reason to stay cautious, however. The Q1 print released May 15 was a clean miss: EPS came in at -$0.60 against a -$0.38 estimate, and revenue of $4.3 million fell short of the $5.1 million consensus. The going concern disclosure from the annual report remains the most important overhang. Annual revenue estimates sit near $20.8 million against a net loss of roughly $12.4 million — a company burning through capital with auditors now flagging survival risk. With a market cap too small to screen for most institutional funds, the shareholder base is heavily concentrated: Alset Inc. holds 39.4% of shares, and Executive Chairman Heng Fai Chan controls another 21.8%. That concentration limits float and amplifies volatility in either direction.
The most recent insider data — now more than nine months old — showed Chan selling 130,679 shares in August 2025 at $1.35, after his firm bought roughly $800,000 worth of stock in December 2024 at $0.97. The stock has since halved from those buy prices. No new insider activity has been disclosed since August.
With the next earnings event confirmed for May 22, the short interest trajectory in the days ahead — whether the remaining 3.3% of float stays put, covers further, or begins to rebuild — will reflect how the market digests the Q1 miss and what, if anything, management says about the path out of going concern status.
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