Short sellers have been piling into RKT with conviction. Short interest has climbed 38.7% over the past month to 8.9% of free float — the highest level since early April. The stock has dropped 21.6% over the same period, with a 12% slide in the past week alone.
The build has been relentless. From roughly 51 million shares short in early April, the position has grown to nearly 86 million shares as of May 18. That's a 21% week-on-week increase.
The positioning is consistent. Bears have added exposure across five consecutive weeks. Mortgage market headwinds — rising rates and subdued origination volumes — appear to be the common thread.
The options market is corroborating the caution. The put/call ratio hit 0.3489 on May 19, running 2.7 standard deviations above its 20-day average of 0.2884. The PCR has been grinding higher from mid-April lows near 0.27.
Here's the tension: while short interest is climbing, the lending market is not under pressure. Availability sits at 849% — roughly eight shares still available to borrow for every one already borrowed. That's tightened from above 1,000% at the start of May, but remains firmly in normal territory.
Cost to borrow dropped 55% over the past week to just 0.19%. That's the lowest in months. More shorts are being added, but the cost of maintaining those positions has never been cheaper.
Despite the selloff, the analyst community has not abandoned the stock. The consensus price target stands at $20.05 — a 54% premium to the current price of $13.04.
Keefe, Bruyette & Woods trimmed their target from $22 to $21 on May 12. RBC held at $20. Stephens initiated at Overweight with a $22.50 target in late April. Barclays upgraded to Overweight on April 6 even as they cut the target to $19.
The gap between where analysts see fair value and where the stock trades has rarely been this wide.
Some large institutions have been adding exposure into the weakness. T. Rowe Price added 11.7 million shares in the most recent reporting period. FMR (Fidelity) added 10.1 million. JP Morgan Asset Management added 5.1 million. BlackRock added 3.6 million.
The insider picture leans net selling — the CTO sold $739K worth of stock on May 6, and the CEO sold $871K in March. But trade significance scores are low (1/10), suggesting these are likely routine plan sales rather than conviction trades.
What to watch: The next earnings event is June 10. The last print triggered a 7.1% single-day gain. With the stock near the bear-case target of $14, the setup into that date will be closely watched on both sides.
| Metric | Value |
|---|---|
| SI % of Free Float | 8.9% |
| SI Change (1-month) | +38.7% |
| Availability | 849% |
| Cost to Borrow | 0.19% |
| Put/Call Ratio | 0.31 (z: +1.27) |
| Price Change (1-month) | -21.6% |
| Consensus Price Target | $20.05 |
| Next Earnings | June 10 |
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