Short Report: Bearish positions reduced after contrasting C3.ai and Figs results

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 1.2%, the Nasdaq Composite was up 1.1%, the Russell 2000 index was up 1.5%, the Russell 2000 Growth ETF (IWO) was up 2.0%, and the Russell 2000 Value ETF (IWN) was up 1.0% in the five-day trading session range through Thursday, March 7.

SHORT INTEREST GAINERS

• Estimated short interest in Atmus Filtration Technologies (ATMU) has been on the rise since mid-February, when the company reported a Q4 earnings beat and better than expected FY24 guidance, while its majority owner Cummins (CMI) disclosed that it plans to complete separation of Atmus. Shorts as a percentage of free float have since increased from 36.5% to this Thursday’s high of 68.1%, with this week’s increase accounting for 11 percentage point rise. Meanwhile shares of Atmus Filtration have also traded steadily higher, rising just over 9% from mid-February and 1% in the five-day period covered.
• Ortex-reported short interest in Phathom Pharmaceuticals (PHAT) rose from 22.5% to 25.9%, the highest level since September of 2022, while the stock has continued its correction from a mid-February spike. Shorts as a percentage of free float has now increased in four out of the past five weeks as the bears continue to fade the 35% jump on February 16th that was followed by a week of upside momentum, with shares falling about 15% in the five-day period covered and 20.5% from the February 23 high.
• Ortex-reported short interest in Westrock Coffee (WEST) spiked from about 17% to 49% in late January, preceding the February 16 peak in the stock price. Short positioning was then little changed for much of February, before this week’s rise from 48.2% to 53.8% – the highest level on record. Days to cover on the name rose from 31.5 to 34.5 – also a record high. Shares, meanwhile, have now lost about 17% of their value from the mid-January levels, with the decline over the five-day period covered this week seen at 8%.
• Estimated short interest in Zynex (ZYXI) had been steady just above the 30% level for much of February, though the company’s Q4 earnings miss last Thursday enticed more bearish exposure. Shorts as a percentage of free float were up from 30.7% to as high as 34.7% this week before settling at 33.8% on Thursday. Meanwhile, Zynex shares, which had fallen just over 9% the day after its results, pared some of that drop to finish the week down about 5%.

SHORT INTEREST DECLINERS

• Ortex-reported short interest in C3.ai (AI) retreated from 35.1% down to 27.3% – the lowest level in a year. Days to cover on the name was also down sharply from 4.8 to 3.0. The company reported a much smaller than expected Q3 earnings loss and raised its FY24 revenue guidance while also naming a new CFO. Shares were up as much as 29% the day after its February 28th results, prompting the short squeeze, though the stock ended the week up a much more modest 7% relative to pre-earnings levels.
• Ortex-reported short interest in Figs (FIGS) was down sharply this week, falling from 22.4% to 14.1%, while days-to-cover slipped from 6.9 all the way down to 2.2 as bears took profits from the stock’s post-earnings decline. The company’s Q4 results on February 28th saw a miss on revenue, while its guidance for 2024 called for potential revenue decline, along with 380-480bps in adjusted EBITDA margin compression. In addition to downbeat guidance, Figs announced the departure of its CFO, with two sell-side firms also downgrading the name. Shares had fallen 13% the day after the results, though the short-covering helped the stock recover two percentage points of losses in the five-day period through Thursday.