Blue Owl Capital heads into its June 4 earnings call with short sellers in the most aggressive posture they've occupied all year — and the stock is already flinching.
Short interest is the dominant story here. OWL's SI % of free float has jumped from roughly 18.6% in late April to 22.4% now — a rise of nearly four percentage points in six weeks. The pace accelerated sharply in the final week of May, when approximately 17 million additional shares were added to the short book in a single session, pushing the weekly change to +13%. At four-plus days to cover on FINRA's latest official report, unwinding these positions is not quick work.
The availability picture adds texture without urgency. Shares available to borrow remain relatively plentiful at around 193% of current short interest — meaning lenders are not squeezed and new shorts can still enter without fighting for supply. Cost to borrow, though ticking up slightly on the week to just above 1%, is well below the mid-May spike that briefly touched 5.4% before collapsing back. That earlier spike proved short-lived, and borrow conditions today look comfortable rather than stressed. The ORTEX short score of 67.7 ranks in the bottom 6th percentile of the universe by short-score percentile rank — confirming that bearish positioning is elevated relative to peers.
Options traders are not matching the shorts' conviction. The put/call ratio has eased to 1.26, running below its 20-day average of 1.30 and sitting 1.65 standard deviations on the defensive side of the mean. That's a meaningful divergence: while short interest has built steadily, the options market has actually dialled back hedging demand through the same period. The PCR touched 1.42 in late April; it's now at a six-week low.
The Street is similarly split. TD Cowen reiterated its Buy with a $14 target in mid-May. Against that, JPMorgan and UBS both hold Neutral ratings — JPMorgan cut its target from $10.50 to $10.00 around the Q1 print, while UBS nudged its Neutral target modestly higher to $9.50. Bulls point to Blue Owl's $307 billion AUM base, the structural demand for private credit and digital infrastructure, and what they characterise as infrastructure-like earnings stability. Bears counter that the firm remains too small relative to the "big five" alternative managers to command a premium multiple, and that recent credit stress in its private credit book — combined with the fallout from its loan strip sale — has dented fundraising momentum. The mean analyst target of $12.63 sits well above the current $10.07 close, though that gap partly reflects the stock's steep year-to-date decline rather than fresh bullishness. Valuation multiples have compressed: the EV/EBITDA has drifted lower over the past month, and the P/E of roughly 10.9x reflects a market still assigning uncertainty to the earnings trajectory. EPS momentum factor scores are weak — the 30-day and 90-day readings rank in the 30th and 17th percentiles respectively.
Institutional flows give short sellers some pause. Capital Research and Management added over 21 million shares through end of April, lifting its stake to nearly 18% of shares outstanding. FMR added roughly 4.7 million shares in the same period. These are not firms that typically build into deteriorating fundamentals. That said, the most recent insider activity on record — three executives selling at $12.30 in February — predates the current sell-off and is too stale to read as a current signal.
The last earnings event on April 30 produced a one-day move of +12.4% and a five-day follow-through of +16.6%. Going into June 4, the setup is notably more complex: short interest is at a cycle high, the stock has given back most of that post-print gain, and analyst targets cluster in a wide band from $9 to $21. What to watch is whether the print shifts the earnings momentum scores — currently in the bottom quintile — or whether the private credit narrative provides enough clarity to alter the trajectory of a short book that has been building with conviction for six weeks.
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