Velo3D has changed shape sharply since last week's note: the short rebuild that defined early May has reversed, the borrow market has loosened considerably, and options traders have turned notably more bullish — even as the stock gave back ground on Tuesday.
The clearest update from the prior note is that short sellers are no longer rebuilding. SI has fallen from 31% of the free float cited last week to 15.6% now, down roughly 11% over the past five trading sessions and 22% over the past month. That decline tracks the stock's broader re-rating — VELO is up 21% on the week and 51% over the past month to $16.99, even after Tuesday's 8.8% pullback. The short score has also softened, easing from 71-72 through early May to 67.9 today, reflecting the reduced bearish positioning relative to recent history.
The borrow market tells the same story, but more dramatically. Cost to borrow has collapsed from a spike above 22% in late April to just 3.7% now — the lowest level in the 30-day history window and roughly half where it was even a week ago. Availability has swung from deeply tight (under 10% of SI through most of April) to a comfortable 134% today, meaning there are now far more shares available to lend than are currently borrowed. That is a decisive reversal from the squeeze dynamics documented in the previous note, when the lending pool was nearly exhausted and fresh shorts faced steep costs to enter.
Options positioning has shifted decisively to the bull side. The put/call ratio has dropped to 0.24, well below its 20-day average of 0.35 and sitting near its lowest level in the past year — a reading that reflects heavy call-side demand relative to recent norms. The z-score of -1.36 marks this as one of the more call-skewed setups of the past twelve months. That bias aligns with the stock's price momentum but stands in mild tension with the 8.8% single-day drop on Tuesday, which may reflect some profit-taking after a powerful run.
The one cover from the Street worth noting: Lake Street raised its price target on May 13 from $18 to $20 while maintaining a Buy rating, with the mean target now at $22.50 — implying roughly 32% upside from Tuesday's close. That is the only publicly covered analyst name on record, and the coverage is recent enough to be relevant. On the ownership side, Arrayed Additive still dominates with 42.8% of shares, while Millennium Management and Thieneman Construction both appear to have entered as new holders in Q1.
The next earnings event is pencilled in for June 10. The last two prints produced outsized moves — a 45% single-day jump on May 12 and an 18% move on May 8 — so the question heading into that date is whether the combination of a loosened borrow market, a high-call options setup, and still-elevated (if falling) SI creates a different kind of catalyst tension than the one that preceded last month's print.
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