Lightwave Logic enters the back half of May with a notable tension at its core: short interest is grinding higher while options traders are becoming more, not less, bullish — a divergence that frames the stock's turbulent recent past.
Short sellers have been rebuilding positions steadily. Short interest as a percentage of free float has climbed to 8.9%, up from roughly 8.6% a month ago and edging back toward the 10% peak seen in late April. The move has been gradual — around 2% on the week — rather than a sharp reversal. Critically, the borrow market is not flashing urgency. Cost to borrow has collapsed 40% over the past week to just 0.38%, the lowest level in at least six weeks, after running above 0.8% in mid-April. Availability has tightened somewhat from the comfortable 160–175% range seen in mid-May, and now sits at 120% — still indicating ample shares for new shorts to borrow, with roughly 1.2 shares available for every one already borrowed. There is no squeeze pressure in the lending market right now.
Options positioning tells the opposite story from short interest. Call demand is running well ahead of puts, with the put/call ratio sliding to 0.33 — below its 20-day average of 0.36 and 1.4 standard deviations on the bullish side of that mean. The 52-week low on the PCR is 0.11, so this is not an extreme reading, but the recent direction is clear: as short sellers edge back in, options traders are leaning into upside. The two camps are watching the same stock and drawing opposite conclusions.
That underlying tug-of-war is coloured by a chaotic few weeks of earnings-related price action. Q1 results dropped on May 15, with Q1 EPS of -$0.04 (flat year-on-year) and revenue of just $29K — enough to prompt a one-day drop of 22%. The five-day follow-through was -14%. But the stock had already absorbed a separate -6.3% one-day move on May 13 ahead of that release. Remarkably, despite this volatility, LWLG has clawed back to $11.97, up 3.3% on the week even after a sharp 6.8% single-day sell-off on May 26. The short score from ORTEX sits at 59.4 — moderate rather than extreme — and has been range-bound between 57 and 59 for the past two weeks, suggesting the bearish positioning thesis is present but not intensifying.
Institutional flows offer some intriguing colour. Marshall Wace added nearly 4.9 million shares in the quarter ending March 31, making them the second-largest reported holder at 3.8% of shares. Millennium Management added close to 2 million shares over the same period. These are active, opportunistic books that move quickly — and both built into what was then a lower price. On the insider side, the recent picture is one-directional: the CFO and multiple directors sold shares in early April at prices between $6.80 and $10.36, netting a combined $933K in sales. No purchases have been reported in that window. The 90-day net value tally, while positive at $3.3M, reflects awards rather than open-market conviction buying.
No next earnings event is currently scheduled. The key thing to watch heading forward is whether the cost to borrow reignites — last time it spiked above 0.8% in mid-April, short interest was close to cycle highs, and the stock subsequently compressed sharply before bouncing. A renewed CTB move alongside rising SI would signal the short thesis is gaining adherents; if it stays flat while short interest keeps building, availability tightening rather than borrow cost will become the next indicator to track.
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