The Trade Desk enters the first week of June in an awkward position: short sellers are quietly trimming, the borrow market has loosened dramatically, and options traders have never been more bullish — yet the stock just fell 9% in a single session to $21.08, its worst one-day drop in weeks.
The repositioning in the lending market is the most striking development since last week's note. Availability has surged to 1,250% — up 78% week-on-week and the loosest the borrow pool has been all year, far above the 52-week low of 266%. That means roughly twelve shares are now available to borrow for every one currently shorted. Cost to borrow has fallen to 0.39%, a multi-month low, down from 0.45% a week ago and 0.49% at the peak in mid-May. Short interest itself has edged lower, now at 16.9% of the free float, off from 17.5% last week. Bears built steadily through May after the Q1 earnings disappointment; what has changed this week is that the active covering is finally showing up in the data, even as the stock continued to sell off.
Options positioning has swung sharply to the bullish end of the range — and the contrast with the price action is hard to ignore. The put/call ratio has dropped to 0.48, sitting more than 1.3 standard deviations below its 20-day average of 0.52. That reading is close to the 52-week low of 0.47, meaning call demand relative to puts has rarely been this dominant over the past year. Combined with the loosening borrow market, the aggregate positioning signal looks far less bearish than it did a month ago. But that optimism is colliding head-on with a stock that has lost 13% in a month and just posted a brutal single-day decline.
The Street has grown measurably more cautious since the May 8 earnings print. The consensus has slipped to a sell, with analysts broadly trimming targets after Q1 guidance disappointed. HSBC downgraded to Reduce shortly after results. William Blair cut to Market Perform. Several buy-rated analysts — including Benchmark, Truist, and RBC Capital — maintained positive ratings but lowered targets meaningfully, with cuts ranging from $5 to $15. The most recent action came from Rothschild & Co, which initiated with a Sell and a $11 target on May 28 — well below the current price and far below the analyst consensus mean of $25.34. The bulls point to 12% year-over-year Q1 revenue growth, long-term CTV and mobile positioning, and a spot on DA Davidson's Best-of-Breed Bison list. Bears counter that growth is decelerating faster than peers, margins are under pressure, and competition from walled gardens remains a structural drag. Factor scores reflect this ambivalence: the 12-month forward EPS growth rank scores in the 90th percentile, yet EPS momentum over both 30 and 90 days ranks in the bottom quartile of the universe.
Institutional holders paint a picture of patient rather than panicked ownership. State Street added more than 15 million shares in its most recent reported period to reach 9.6% of shares. BlackRock added 1.8 million shares. Founder and CEO Jeffrey Green holds 10.4% of the company with no reported change. Insider activity has been one-directional: director Samantha Jacobson sold $1.1 million worth of stock on May 28, and smaller routine sales from the CFO and CLO occurred on May 15. The 90-day insider net is heavily skewed toward selling — net proceeds of roughly $155 million — though a significant portion likely reflects planned disposal programs rather than conviction calls. The short score has eased slightly to 53.6, down from 55.6 a week ago, consistent with the modest short covering in the data.
Among ad-tech peers, the divergence this week is notable. PUBM gained 14% on the week and DV rose 10%, while TTD fell nearly 5% over the same period. MGNI slipped 3% on Tuesday alone. The next earnings event is scheduled for August 7 — the last two prints each triggered multi-day sell-offs averaging close to 10% over the subsequent week. With the borrow pool loose, options traders positioned for a recovery, and a fresh Sell initiation anchoring the bearish narrative, the August report will test whether the growth story can separate itself from the rest of a sector that appears to be recovering faster than TTD is.
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