Formula Systems (1985) Ltd. heads into its May 22 earnings date with borrow costs at their lowest level in months — a sharp reversal from a lending market that was severely stressed just five months ago.
The clearest change in positioning is in the cost to borrow. After peaking above 69% last November and holding above 50% into January, the annualised borrow rate has fallen to 9.3%. That is a drop of more than 84% from peak levels over roughly four months. The easing reflects a lending market that has loosened materially. Availability, however, remains tight: the 52-week high on availability utilisation was 100%, and the borrow pool only touched that ceiling as recently as April 9. This week the picture improved, with availability loosening to around 42% — meaning roughly two shares are still available per share already lent — but the borrow market remains well tighter than it was a year ago.
Short interest, by contrast, tells a very small story. The estimated short position amounts to fewer than 80 shares at the ADR level — representing just 0.001% of the free float. At these levels, short positioning carries no meaningful weight as a signal. The week-on-week percentage change figure looks dramatic in isolation, but it is arithmetic noise on an almost zero base. The share count bouncing between single digits and low hundreds over the past 30 days confirms this is a structurally illiquid borrow market with minimal directional conviction from short sellers.
The ownership structure explains why the borrow market behaved so unusually. Asseco Poland holds 25.8% of shares, while CEO Guy Bernstein controls another 11.7%. Several Israeli institutional managers — Harel, Menora Mivtachim, Phoenix, Yelin Lapidot, and Clal — collectively account for roughly another 34% of the register. That leaves a genuinely small tradeable float. When even modest borrow demand emerged against that narrow pool last autumn, the cost to borrow surged. The April wave of SEC Form 3 filings — covering eight new insiders with effective dates of March 18 — adds context: these appear related to the Asseco Poland group and reflect the formalising of its expanded boardroom presence rather than open-market transactions. No insider purchases or sales from named executives appear in the dataset.
The price action this week is mildly constructive. The stock closed at $132.48 on April 28, down 2.8% on the day but up 2.8% on the week and 6% over the past month. Earnings history shows a mixed record on initial reactions. The most recent event, on March 30, produced an 11.7% one-day decline. The November 2025 release also fell 7% on the day. Against that, the November 27 update delivered a 6.8% pop and a 16.7% five-day gain. The pattern is inconsistent, with moves in both directions exceeding 6% in recent quarters.
The ORTEX short score has drifted lower this week — from 55 at the start of the month to 50.3 — indicating the bearish positioning signal has softened, though it remains in mid-range rather than extreme territory. The dividend score ranks in the 32nd percentile, consistent with the stale dividend history: the last confirmed payout was in April 2022, denominated in ILS, and no more recent distributions appear in the data. Investors should verify the current dividend status directly before drawing conclusions on yield.
With earnings confirmed for May 22 and the borrow market having relaxed significantly from its late-2025 stress levels, the key question into the print is whether the normalised cost to borrow persists — or whether a post-earnings reaction tight against a narrow float pushes availability back toward 0%.
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