Short Report: Bearish position in Carvana nudges higher as shares slip

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 0.8%, the Nasdaq Composite was up 0.9%, the Russell 2000 index up 2.0%, the Russell 2000 Growth ETF (IWO) was up 2.4%, and the Russell 2000 Value ETF (IWN) was up 1.8% in the four-day trading session range through Thursday, December 28th.

SHORT INTEREST GAINERS

• Estimated short interest in Carvana (CVNA) was up from 38.9% to 42.4% this week while the stock had consolidated some of its outstanding gains as of late, slipping nearly 6% in the four-day period covered. Shares of Carvana had been on a tear, doubling from early November, as expectations for a more accommodative Fed policy following the most recent FOMC meeting this month became a boon to the company’s financial position that had widely been perceived to be overleveraged prior to its debt restructuring several months ago. Heading into the end of the year, Carvana also looks to end 2023 as a “10-bagger” from the severely beaten down levels of late 2022.
• Estimated short interest in Biomea Fusion (BMEA) jumped from 50.5% to an all-times high of 58.7% this week, while the stock rose 6% in holiday-thinned trading. Shares of Biomea have been particularly volatile in the final week of November through the first week of December, doubling in the wake of the announced acceptance of three of its abstracts evaluating BMF-219 as a potential treatment for people with type 2 diabetes, at the 17th International Conference on Advanced Technologies & Treatments for Diabetes, or ATTD, in March and then erasing all of those gains. That volatility has since been dialed down to a simmer, though bearish activity remains high in the stock, with exchange-reported data through December 15th also showing a significant increase in shorts from 46% to 56% – the fourth consecutive half-month period increase.
• Ortex-reported short interest in Nordstrom (JWN) briefly slipped to a three-month low of 18% early in the week but then rose to 20.4% by Thursday, ending the four-day period covered up nearly two percentage points. The stock has seen its fortunes turn swiftly, rising 15% in the span of the past three weeks and 2.3% in the four-day period covered, though volumes are certainly much thinner relative to the first half of the month. Shares of Nordstrom had made a three-year low below $13 as recently as November, though the subsequent near-50% bounce has the stock on track for a respectable mid-teen gain for the year.

SHORT INTEREST DECLINERS

• Ortex-reported short interest in Eyepoint Pharmaceuticals (EYPT) continues to slide sharply, falling from 20.4% to a 9-month low of 13.7% this week. We had profiled Eyepoint three weeks ago as its stock had near-tripled when the company announced positive Phase 2 trial data for EYP-1901, an investigational treatment for wet age-related macular degeneration. Heading into the year-end, Eyepoint shares have now near-quadrupled, gaining another 13% in the four-day period covered this week.
• Estimated short interest in Canada Goose (GOOS) hit a 2023-high around 35% just two weeks ago, though bears are reducing exposure in year-end profit-taking. Shorts as a percentage of free float is down all the way to 26% this week – a three-month low. The stock is down 3.8% this week, though its 32% year-to-date slide is among the worst in Apparel manufacturer names, many of which saw a turn of fortune for the better over the past two months.