Redwire Corporation has delivered one of the more punishing weeks for its short sellers in recent memory — up 58% in five sessions and 128% over the past month, with bears holding a 16.5% short position that has become significantly more expensive to defend.
The price action is the story. RDW closed Tuesday at $22.04, up 26% in a single session and more than double its level a month ago. The move came after post-earnings momentum that has simply not allowed short sellers to recalibrate. Since the May 20 earnings print — where the stock jumped over 10% on the day — the rally has compounded on itself, and the previous note's observation that bears had not capitulated now looks like the key fault line. Shorts who rebuilt positions after the May 20 result at levels around $13–$14 are deeply underwater.
The positioning picture is evolving fast. Short interest dropped sharply on May 26, falling to 16.5% of free float from 17.8% the prior session — a one-day decline of nearly 2 million shares. That covers the most recent rebuild flagged in last week's post-earnings note, though the float remains heavily shorted by any standard. The more significant shift is in the borrow market: availability has loosened considerably, jumping to 128% from the 83–85% range seen mid-week and well above the sub-60% levels that prevailed through late April. Cost to borrow is essentially flat at 0.49% — near its lowest in the past six weeks — which means there is no immediate squeeze pressure in the lending pool. Shorts can still get stock. The ORTEX short score has eased to 63.2 from a mid-week high of 65.1, though it remains in elevated territory and well above where it was a month ago.
Options positioning has stayed more cautious than the price action alone would imply. The put/call ratio has held around 0.52 — above its 20-day average of 0.41 and roughly 1.2 standard deviations elevated. That is a meaningfully more hedged posture than the ultra-low readings of 0.27–0.31 seen in late April. Investors who rode the rally appear to be buying protection rather than simply pressing longs. The PCR 52-week high is 1.10, so the current level is not at extremes, but the direction of travel — steadily climbing since early May — suggests the option market is pricing in more two-way risk than the bullish consensus might imply.
The Street has not caught up with the move, and that mismatch is the week's sharpest tension. The mean analyst price target sits at $14.44 — a figure now sitting roughly 35% below the current price. The most recent analyst action was Canaccord Genuity raising its target to $14 on May 11, before the latest leg of the rally. The bull case, freshly updated by Benzinga, centres on Golden Dome exposure and the Edge Autonomy acquisition driving accelerated 2026 revenue growth toward $475M. The bear case is now arguably more pressing: at $22, RDW trades at roughly 7x EV/revenue against that same $475M estimate — a multiple the bear case explicitly frames as stretched for a company still generating negative EPS and negative EBITDA, with an EV/EBITDA ratio that is essentially undefined at current earnings levels. The EPS surprise factor score is strong at the 94th percentile, and forward EPS momentum ranks 67th, but quality remains a structural weakness — the Piotroski F-score is low and ROA is negative.
Institutional flows have been active, but the dominant insider story adds a layer of complexity. AE Industrial Partners, the 10%-plus owner and board-represented shareholder, sold more than 47 million shares across multiple tranches between mid-April and May 18 — at prices ranging from $9.70 to $14.50. Those sales, totalling roughly $672M in reported value over 90 days, were executed at levels well below where the stock trades today. The extent of that programme at lower prices is notable context for the current valuation debate. Meanwhile, institutional buyers have been accumulating: BlackRock added 5.1 million shares to reach 5.6% of outstanding, Citadel built to 4.7%, and State Street added 2.2 million shares. The picture is one of a large insider lightening at the rally's earlier stages while passive and quantitative managers absorb the float.
Among correlated peers, SIDU matched RDW almost tick-for-tick, up 58.6% on the week. FLY added 34%. RKLB gained 9%. The breadth of the move across space-and-defense names suggests a sector re-rating is at work, not simply a company-specific catalyst — which matters for how durable the multiple expansion proves to be. The next earnings event is not until August 6, leaving a twelve-week window in which the price-versus-analyst-target gap either closes through upgrades or narrows via price correction.
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