SoundHound AI enters the first week of June with the cost to carry a short position falling fast — yet the borrow market itself remains completely sealed, and 37.4% of the float is still held short.
The borrow cost story is the clearest change since the last note. Cost to borrow has more than halved over the past month, dropping from a peak near 61% in early May to 13.9% today — the lowest reading in the 30-day window. The decline has been steady and unbroken across every session since May 22. That matters because it reduces the daily carry burden on the short book. Shorts who have been bleeding roughly 30% annualised on borrowed shares are now bleeding less than half that. The directional pressure to cover urgently is easing, even if the structural position has not. The ORTEX short score has drifted down to 80.97 from 85.1 ten days ago — still extreme, but no longer at its recent ceiling.
Availability tells a different story. Every share in the lending pool remains lent out — availability is at exactly 0%, a condition that has held almost without interruption since late April. No new supply is entering the market. Shorts who want out still must buy in the open market at whatever price is available. Short interest is 37.4% of the free float — down from the 39.4% mid-May peak, and down a further 4% on the week — but 145 million shares is still an enormous absolute position. FINRA's latest fortnightly filing puts days to cover at 4.1 days. The covering trend is real and now three weeks old, but the borrow wall is intact and the stock dropped 4.6% on Tuesday alone, closing at $8.82 after touching $9.00 last week. That pullback arrived precisely as the cost to borrow became less punishing — worth watching as a possible signal that the urgency to cover is fading.
Options traders remain notably more constructive than the short book. The put/call ratio is 0.42, more than two standard deviations below its 20-day average of 0.46 — close to the 52-week low of 0.31. That means call demand is running well above normal, with buyers positioned for upside even as the stock gave back ground this week. The gap between the options market's bullish lean and the short book's continued 37%-plus position is the defining tension in SOUN right now. Peers RMNI and ORCL both surged on the week — 19% and 27% respectively — while SOUN's 8.5% weekly gain looks modest by comparison. AUR added 10% and PGY 14%, suggesting the broader AI-adjacent peer group ran harder than SOUN managed.
The Street offers thin coverage and a mixed message. The consensus sits at hold, with a mean price target of $14.25 against a current price of $8.82 — a gap that appears mathematically attractive but reflects a small, stale analyst base. The most recent action was DA Davidson maintaining its Buy rating and $14 target in late April; HC Wainwright had cut its target from $26 to $20 back in March. Bulls point to a debt-free balance sheet, diversified revenue across royalties and voice commerce, and what the factor data underlines — SOUN ranks in the 100th percentile on 30-day EPS momentum and the 99th on 90-day EPS momentum, with a 98th-percentile score on forward EPS growth expectations. Bears counter that the stock still trades at roughly 30x 2026 estimated revenue and that execution risk in Voice AI is rising.
Insider activity from March adds context without changing the direction. The CEO, CFO, COO, CTO and both co-founders all sold shares on March 20, at prices around $6.79 — well below current levels. The combined 90-day net sell is approximately $2.8 million in value. These were modest in dollar terms relative to the positions held, and the sales occurred when the stock was lower, but the breadth of participation across the leadership team is notable.
The next scheduled earnings event is August 6. Between now and then, the question for SOUN is whether the gradual easing in borrow cost — now below 14% for the first time since late April — reduces enough cover urgency to let the short position stabilise at current levels, or whether the locked availability eventually forces the remaining 145 million short shares into a market with no supply on the other side.
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