GDS Holdings reports Q1 2026 earnings today with its lending market at the tightest point of the year — a signal that demand for short exposure has compressed what little borrowing capacity remained.
Availability has fallen to just 3.2%, meaning for every 30 shares already on loan, barely one sits available to borrow. That is a near-complete exhaustion of the lending pool. For most of the past month, availability has oscillated between 1% and 10%, spiking only briefly to a mid-30s reading in late April before snapping back. Cost to borrow has eased to around 1.1% — down roughly 24% on the week — suggesting this isn't a runaway squeeze, but the structural tightness remains. Short interest itself has pulled back sharply: the 19% one-week decline brings the SI % of free float to roughly 4.9%, reversing a build that peaked near 6% in early May when short interest ran above 12 million shares. Days to cover stands at 7.8, meaning any forced unwind would take over a week of normal trading to clear.
Options traders are telling a different story from the short sellers. The put/call ratio has compressed to 0.39, well below its 20-day average of 0.42 and approaching its 52-week low of 0.33. That leans call-heavy — a tilt toward upside positioning that stands in contrast to the elevated short exposure in the lending market. The stock itself has given back ground into the print, falling nearly 10% over the past month to $40.41, including a 3.1% drop on Tuesday and a 5.5% slide on the week. That pullback has trimmed the year-to-date gain to around 21.6%, though it still outpaces most of the peer group: surged 11.9% on the week while dropped 16.6% over the same period, highlighting a bifurcation between China-focused data centre names and AI-adjacent US plays.
The bull and bear camps are fundamentally split on China exposure. Bulls point to the C-REIT launch — valued at roughly 22x 2026 EBITDA — as evidence that GDS's Chinese data centre assets can command a premium well above the company's current ~15x EV/EBITDA multiple. International operations are tracking toward more than $1 billion in EBITDA by 2028, adding a growth leg independent of the domestic market. Bears counter that the Chinese tech demand cycle remains fragile, that structural REIT market shifts cloud the sum-of-the-parts case, and that the non-China build-out carries meaningful execution and regulatory risk. Analyst consensus from mid-2025 was broadly constructive — JP Morgan and RBC both upgraded — though the most recent note, a modest TD Cowen target trim to $37 in November 2025, nudged the other direction. The consensus target now sits well above the current price, implying roughly 33.7% upside, but that consensus reflects views formed before the recent selloff.
Today's print is fundamentally a test of whether the international growth narrative can hold against a backdrop of renewed pressure on the China-facing business — and whether the EBITDA trajectory justifies a multiple that still sits at a discount to the C-REIT's implied valuation.
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