Short Report: Rocket Companies short interest at record high

Welcome to this week’s installment of “The Short Interest Report” – The Fly’s weekly recap of short interest trends among some of the most widely followed high-short-float stocks. Using the data from our partner Ortex.com, which utilizes the latest information from stock lenders to estimate short interest changes for thousands of publicly traded companies, this report will screen for some of biggest changes in short interest as a percentage of free float and days-to-cover ratios while also considering the short interest data on some of the more volatile and heavier-traded names of the week. Based on the availability of data from Ortex, the report tracks the trading period that covers prior Friday through Thursday of this week, excluding holidays. As a basis of comparison for stocks discussed below, the S&P 500 index was up 2.7%, the Nasdaq Composite was up 3.2%, the Russell 2000 index was up 2.8%, the Russell 2000 Growth ETF (IWO) was up 2.9%, and the Russell 2000 Value ETF (IWN) was up 2.7% in the five-day trading session range through June 26.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Rocket Companies (RKT) resumed its climb this week after taking a brief pause last week as shortsellers are becoming increasingly more emboldened by the cracks in the housing market amid steadily rising inventories. Shorts as a percentage of free float reached a record high of 55.3% in the first week of June, pulled back to 48%, but this week, the short interest hit new record highs of 55.8%. With rising volume, days to cover on the name was up by a much more modest increment – from 8.0 to 8.1. The stock has rebounded from its early-May lows by 30%, while year-to-date, Rocket is up 26%. In the five-day period covered, shares were up 5%.
• Ortex-reported short interest on Dave & Busters (PLAY) bounced from 25.5% level on June 23rd just as it did before on June 9, though the extent of bearish appetite was notably greater. Shorts as a percentage of free float on the stock for the week rose from 28.7% all the way to 34.4% – a six-week high. Meanwhile, with strong volume responding to the company’s impressive Q1 earnings beat on June 10th, days-to-cover on the name was down from 6.3 to 5.8. In the five-day period covered, Dave & Busters has come off about 5%, though shares have still doubled from early April lows.
• Since September of last year, Ortex-reported short interest on Mara Holdings (MARA) has seen its peaks correlate with major upward inflections and its trough with downward inflections in the stock price, making this week’s large jump in bearish expression somewhat suspicious. Shorts as a percentage of free float rose from 24.8% to 28.5%, though days to cover on the name was little changed at 4.4, which tracks with an increase in trading volume amid heightened volatility in the crypto-verse. In the five-day period covered, Mara shares are up 5.4%, though year-to-date, the stock is down 10.4%.
• Ortex-reported short interest in Madrigal Pharmaceuticals had troughed at a 10-month of 31% on June 13th but saw a spike this week from 31.3% to 38.4% – a five-week high. Days to cover on the stock remained unchanged around 6.1 amid an increase in trading volume, especially over the past two days. With no news catalysts, the stock was up about 6% in the five-day period covered through Thursday, though year-to-date, shares are still down by 2.5%.

SHORT INTEREST DECLINERS

• Souring sentiment on EVs has sent shares of charging infrastructure play EVgo (EVGO) to 9-month lows as recently as March, though the stock has been trading with more conviction over the past three months, sending some of the bears to the exits. This week, shorts as a percentage of free float on EVgo fell particularly steeply, slipping from 23.6% to 20.2%. The sharp decline also matches exchange-reported data, which saw a drop of over four percentage points to 20.5%. The stock was down 9% in the five-day period covered but remains higher by 72% from its March lows and now trades down just 8% year-to-date.