Short Report: Bears betting on stalled rebound for The Gap

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 3.0%, the Russell 2000 index was up 0.5%, the Russell 2000 Growth ETF (IWO) was up 0.9%, and the Russell 2000 Value ETF (IWN) was up 0.1% in the five-day trading session range.

SHORT INTEREST GAINERS

• Ortex-reported short interest on The Gap (GPS) has been submerged below the 20% level for much of the year, briefly surfacing above that threshold in early April and then diving back toward the 15%-18% range for the past two months. This week however, shorts as a percentage of free float spiked from 17.1% all the way up to 21.8% – a record high for the name. The stock has had a resurgence since reporting a much better than expected quarter in Q1 in late May with a 29% rally, and the bears are betting that the rally will stall. In the five-day period covered through Thursday, The Gap stock was up just 2.5%.
• Estimated short interest on EVgo (EVGO) collapsed from 31.0% to 2023-low of 17.6% in the wake of the company’s $125M equity raise last week while its stock price also fell by over 30%. Shares have found some support in the $3.60 area and have now bounced about 20% from the lows, even though the rebound has been hampered by last week’s news of Tesla (TSLA) partnership with GM (GM) on EV charging infrastructure. The stock was up just 1.1% in the five-day period covered, though the short position as a percentage of float was up from 19.4% to 22.3% this week. With trading volume pick up reflecting the broadening debate over the EV charger market share, Days to Cover on EVgo has slipped to a one-year low of 8.2 from 9.0.
• Estimated short interest on eXp World Holdings (EXPI) rose from 16.6% to 20.0% – the first time above that key level since November of 2022. Days to Cover on the name was also up by a notable margin, rising from 22.5 to a record high 26.3. The stock got a big boost last Wednesday when it was added to the S&P SmallCap 600 index, jumping by just over 20% in the following trading session, and the bears are betting on some retrenching. Shares of eXp World Holdings were down 2.9% in the five-day period covered.
• Ortex-reported short interest on Revolve Group (RVLV) hit a one-month low of 24.2% on May 29 and has been on the upswing ever since then with 13 consecutive sessions of gains. This week, bearish activity was especially pronounced, with short position rising from 28.5% to 33.3% – a four-month high – as bears once again set their sights on Consumer Cyclical / Apparel names. Days to Cover on Revolve was up 40 basis points to 7.0 – a six-week high. Trading volume on Revolve has been more elevated, even though the news flow on the stock was light and volatility has been compressed. In the five-day period covered, Revolve shares were up just 3.8%.

SHORT INTEREST DECLINERS

• Estimated short interest on Reata Pharmaceuticals (RETA) briefly reached a six-week high of 20% last week but has pulled back sharply to an eight-month low of 16.0% as of Thursday. The stock had also rallied to a one-month high into the announcement of the FDA filing acceptance of SKYCLARYS new drug application, though shares have since pared those gains. In the five day period covered as of Thursday, Reata Pharmaceuticals was flat.