Short Report: Viking Therapeutics short interest at 5-year high after VK273 data

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 down 1.5%, the Nasdaq Composite was down 2.8%, the Russell 2000 index was down 1.1%, the Russell 2000 Growth ETF (IWO) was down 1.1%, and the Russell 2000 Value ETF (IWN) was down 0.9% in the five-day trading session range through August 21.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Viking Therapeutics (VKTX) has spiked this week from 26.4% all the way to 30.8%, the highest level since early 2020, while days-to-cover was up from 10.2 to 11.1 despite the outsized trading volume for much of the week. Viking’s Phase 2 data readout for VK2735 – a promising oral formulation of a GLP-1 obesity treatment – is driving the trading activity and the volatility. The stock was down nearly 45% intraday on Tuesday when the results were released as investors gauged the data to be inferior relative to Phase 1, with analysts also zeroing in on the 20% discontinuation rate due to adverse events. Shares of Viking had more than doubled from April lows ahead of the data, though with this week’s 36% decline, the stock is now 35% year-to-date.
• Ortex-reported short interest on TeraWulf (WULF) had tracked in 29%-34% band since late March, though this week, bearish positioning on the stock is breaking out of a five-point five-month-long range, jumping to a record high of 36%. Days-to-cover on the name is up from 1.9 to 2.4 despite high trading volume. Bears are betting on some mean reversion following a 60% spike in the stock price on August 14 when the company announced a 200+ MW, 10-year AI hosting agreement with Fluidstack along with a long-term ground lease at the Cayuga site. Shares in the data center infrastructure play saw some further momentum to close the week up about 6%, with the stock now having gained 62% year-to-date.
• Ortex-reported short interest on NuScale Power (SMR) had been on the rise since hitting a low of 16% in the first week of June, though this week, the increase in short positioning as a percentage of free float has accelerated, rising from 23.2% to 26.1% – a one-year high. Meanwhile, the stock hit a record high in the final week of July before a disappointing set of Q1 results accompanied by a $500M equity raise on August 11 has sparked a 35% retreat from that peak. Late this week, BofA analysts also downgraded the modular nuclear reactor name due to its early commercialization stage, a lack of binding contracts, and a valuation that “already prices in significant future success”. In the five-day period covered, NuScale was down 7%, though year-to-date, shares still boast a sizable 95% advance.
• Ortex-reported short interest in MoonLake Therapeutics (MLTX) had troughed in the 21.4%-22.4% range since the first week of May before a break-out this week, jumping from 21.5% last Thursday all the way to 25.4% over a five-session span – the highest level since early April. The stock has had a strong run over this four and a half month period, gaining about 70%, with the tailwind of takeover by Merck on June 2nd driving a 20% intraday jump, though with that rumor now nearly three months removed and no announcement forthcoming, bears are looking for some consolidation. In the five-day period covered this week, the stock was down 1.3%.

SHORT INTEREST DECLINERS

• Ortex-reported short interest in Neurogene (NGNE) had tracked in a 75%-80% range over the past three weeks, though with the stock largely holding its gains following a July 1 spike – when the company had announced a registrational clinical trial designed to evaluate NGN-401 gene therapy for the treatment of females with Rett syndrome – the bears are moving on. Shorts as a percentage of free float were down from 78.5% to 56.2% this week – the lowest levels since early April – while days-to-cover rose from 29.9 to 32.7 as trading volume this week has dried up. The stock was down 2.2% in the five-day period covered, and year-to-date, Neurogene is off by 12.6%.