Short Report: Bearish bets in crypto arena renewed as coins and stocks rebound

Short interest in Coinbase and Silvergate moves higher while stocks bounce 10% on another crypto thaw; Squaring of shorts in EV space continues

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. As a basis of comparison for stocks discussed below, the S&P 500 index was up 0.2%, the Russell 2000 index was up 1.4%, the Russell 1000 Growth ETF (IWF) was up 0.3%, and the Russell 1000 Value ETF (IWD) was up 0.4% in the five-day trading session range.

SHORT INTEREST GAINERS

• The ”cold front” of the first two weeks of February within the overall thaw in “crypto winter” has snapped this week as bitcoin prices resumed their recent recovery, piercing above the $25,000 level on Thursday for the first time since August. Heavily-shorted shares within the crypto arena that we cover have tracked those gains, with both Silvergate Capital (SI) and Coinbase (COIN) up about 10% in the five-day period covered through Thursday. Despite the upward thrust in coin and share prices, bearish bets as expressed by the short interest in those stocks are unrelenting. Ortex-reported short interest in Silvergate was up from 77.6% to 82.1% – within a percentage point of record highs seen in late January – while what of Coinbase rose from 21.3% to 22.6% – the first increase in a Friday through Thursday period in three weeks.
• Ortex-reported short interest in Mirati Therapeutics (MRTX) rose from 22.2% to 26.5% this week – the largest level in four years – with the bulk of the increase coming on Thursday. Bearish bets as a percentage of overall free float have been sustained above the 20% mark since late December when short interest jumped from 18% to 23% and followed the FDA decision to grant the company’s adagrasib a breakthrough designation. In the five-day period covered through Thursday, Mirati Therapeutics shares were down 3.6%.
• Estimated short interest in Stitch Fix (SFIX) sank to a six-month bottom around 18% in mid-January but has since gone up in three of the prior four weeks. This week’s the short position as a percentage of free float was up from 19.8% to 23.5% – the highest level in three months. As we discussed two weeks ago, spurts of upside momentum in the stock has coincided with short interest expression, and that pattern was on display this week again – the stock was up 9.5% in the five-day period covered.

SHORT INTEREST DECLINERS

• Unlike the crypto arena, where bearish bets have picked up with the rise in stock prices, the EV space has seen a continued downturn among names we track that is also sustaining a direct correlation with short interest. Both names we mentioned among short interest decliners last week – Blink Charging (BLNK) and Canoo (GOEV) – have seen shorts slash their bets even further. Ortex- reported short interest in Blink Charging was down from 26.9% to 21.8% while that of Canoo was down from 16.4% to 11.4% – roughly a two-year low in both names. Shares of Blink were down about 2% in the five-day period covered while that of Canoo was off by over 7% and will drop out of our coverage as a penny stock.
• Estimated short interest in Nordstrom (JWN) hit a two-month high in early February in conjunction with a 30% surge in the stock price following a Wall Street Journal report that activist investor Ryan Cohen had taken a sizeable stake in the name. Those gains have been near-completely erased however, with bearish bets also being squared in the process. This week, Ortex-reported short interest in Nordstrom slipped from 25.5% to 21.8% – a seven-week low – while days-to-cover on the name was down nearly 200 basis points to 3.6, a three-month low. Nordstrom stock slipped 1.7% in the five-day period covered following a 18% retreat in the prior week.

Keywords: Short selling, short interest, days to cover, securities, lending, utilization, sentiment analysis, Mirati Therapeutics, Stitch Fix, Coinbase, Silvergate, Blink Technology, Canoo, Nordstrom