Cleveland-Cliffs has rallied hard this week, yet short sellers have barely flinched — and that disconnect is the most interesting thing in the setup right now.
The stock gained 18% over the past five sessions, closing at $11.98 after a 6.7% single-day move on May 26. That puts it up 23% over the past month, a genuine repricing for a steel name that had been left for dead. Yet short interest, measured as a percentage of free float, has barely moved — sitting at 12.9% of float. The week-on-week decline was less than 1%. Shorts have not covered in any meaningful way despite being on the wrong side of a double-digit move.
The borrow market tells a nuanced story. Availability is generous — roughly 596% of estimated short interest, meaning there are nearly six shares available to borrow for every one already lent out. That level is well above the 52-week low of 118%, and the pool of borrowable shares is large enough that new shorts face no structural obstacle. Cost to borrow jumped 71% over the week but remains negligible in absolute terms at 0.42% annualised — this is not a punishing environment for short-side positioning. Options, meanwhile, show no elevated defensiveness: the put/call ratio edged up to 0.42 on the final session after running at multi-week lows near 0.38–0.39, still close to the bottom of its 52-week range of 0.38–0.61. Call-side activity has dominated through most of May, consistent with the rally rather than against it.
The Street is largely unimpressed by the move. The consensus is a sell, with a mean analyst price target of $10.50 — below the current price of $11.98. Barclays initiated coverage on May 22 with an Underweight rating and a $9 target, the freshest read from the sell side. Morgan Stanley keeps its Overweight but slashed its target from $16.80 to $12.00 back in April, while JPMorgan trimmed to $10 from $13. The directional story from the Street has been one of target compression. Bulls cite the potential POSCO partnership and a cyclical uptick in steel pricing; bears point to weakening automotive demand, overcapacity from China, and a balance sheet still carrying heavy debt from prior equity offerings. The EV/EBITDA multiple has climbed alongside the stock to just under 10x, while the P/E is deeply negative — the company is not earning its way into this valuation. Factor scores reinforce the bear case: the ORTEX short score of 58 is elevated, and recent notes flag an F-score of just 2 alongside a negative return on assets, placing fundamental quality well below peer STLD.
Institutional ownership does offer one contrarian note. BlackRock added 5.4 million shares to reach a 10.3% stake, and State Street added over 10 million shares — both reported as of April 30. Two Sigma built a new position of nearly 9.1 million shares in Q1. That pace of passive and quant accumulation at lower prices adds a floor dynamic that is worth watching, even if the fundamental quality picture remains weak. On the insider side, the signal is mixed at best: CEO Lourenco Goncalves sold 3 million shares at $12.42 in February, and the COO sold $2 million worth the same month. The 90-day net insider position is technically positive in share count, driven by a small director purchase, but the dollar-weighted flow is heavily negative.
Earnings reaction history adds caution to the rally. The May 14 print triggered a 6.2% drop the next day; the April 20 release fell 8.1% on the day before recovering 6.7% over five sessions. Two consecutive releases where the stock fell sharply on day one. There is no next earnings date flagged in the data yet, so the immediate catalyst calendar is quiet — but when the next print does arrive, the pattern of sell-the-event reactions is well-established.
What to watch: whether short interest, still stubbornly anchored near 13% of float despite the rally, starts to cover in size — or whether the borrow pool and low carry cost continue to attract fresh positioning against the stock at these levels.
See the live data behind this article on ORTEX.
Open CLF on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
