Short Report: Bearish bets on B. Riley reach 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 0.2%, the Nasdaq Composite was down 0.3%, the Russell 2000 index up 0.8%, the Russell 2000 Growth ETF (IWO) was up 0.8%, and the Russell 2000 Value ETF (IWN) was up 0.9% in the five-day trading session range through Thursday, November 30.

SHORT INTEREST GAINERS

• Estimated short interest on B. Riley (RILY) has spiked to an all-time high this week, jumping from 28.1% to 44.3%, while the stock continues to flounder, losing another 19% in the five-day period covered. Shares are now down over 50% in the past month following the Moody’s downgrade of Franchise Group, citing high financial leverage and weak interest coverage. Rising Ortex short interest estimates are also reflected by the exchange-reported data, which saw the short position as a percentage of free float jump to about 40% as of November 15.
• Estimated short interest increase in Cricut (CRCT) is the second biggest percentage point change in our coverage, rising from 19.9% to a two-year high of 30.0%. The stock was basically flat in the five-day period though Thursday, and while shares rose 4.8% on Friday, Cricut is still down about 13% since November 7th when the company reported a sharp top-line miss.
• Estimated short interest in Luminar (LAZR) increased from 21.9% to 25.2% in the five-day period covered – a three-week high and a within a point of a 4-month high of 26%. Likewise, the exchange-reported short position on Luminar had trended higher as of November 15th, rising from 23.5% to 25.5% and eclipsing the 24.7% level on October 15. Meanwhile, the stock was down about 9% and has now lost 38% from this month’s high. The Street was unanimously unimpressed by Luminar’s Q3 results early last month, with analysts from TD Cowen noting short-term customer decision delays injecting uncertainty into its growth trajectory and a research note from Baird also citing macro weakness weighing on long-term revenue outlook.
• Ortex-reported short interest in Lemonade (LMND) had tracked in the 23.0%-23.5% range over the course of two weeks through last Friday, but bearish appetite had ticked up this week, rising from 23.4% to 26.1% in the five-day period through Thursday. Shares, meanwhile, rose 6% as of Thursday and another 3.5% on Friday as investors shrugged a downgrade to Perform from Outperform out of Oppenheimer. The firm had warned that the recent gains in the stock were driven by reduced weather impact and initial rate increases and that the return to normal weather patterns in 2024 could pressure gross margins.

SHORT INTEREST DECLINERS

• Estimated short interest in Birkenstock (BIRK) was down another six percentage points at 25.4% in the five-day period covered through Thursday, while the stock rose 10.3%, and added 5% to those gains on Friday. Birkenstock’s October IPO debut was less than spectacular as shares fell by as much as 22% relative to its priced level of $46 in the first three days of trading. The stock rebounded over the course of November, and bears were initially skeptical of the rebound, boosting their positions to as much as 33% of float, though the sustained in the stock price rally has led some of the shorts to reconsider that conviction.
• Estimated short interest in Verve Therapeutics (VERV) slipped from 28.5% all the way down to 22.0%, while the stock was down just over 6% in the five-day period covered. The company is now nearly three weeks removed from the steep 40% one-day drop that followed the reported developments of VERVE-101 study of people living with heterozygous familial hypercholesterolemia, when two patients experienced “serious adverse events”, and the stock has recovered nearly half of the value lost on November 13, prompting some short covering from 6-month high levels.