Short Report: Bears pare exposure in crypto stocks as bitcoin slumps

Short interest in MicroStrategy and other crypto names squared amid bitcoin retreat; Trupanion shorts gather steam in wake of management shakeup

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 down 0.4%, the Russell 2000 index was down 0.4%, the Russell 2000 Growth ETF (IWO) was down 0.2%, and the Russell 2000 Value ETF (IWN) was down 0.7% in the five-day trading session range.

SHORT INTEREST GAINERS

• Estimated short interest in Trupanion (TRUP) has been on a gradual climb from low 20%’s since early February, and the bearish expression accelerated starting last week, reaching a mid-2020 high above 32%. The post-pandemic environment has not been kind to the pet economy stocks that saw extreme runs over the second half of 2020, but the correction in Trupanion has been particularly steep of late – the stock fell sharply late in March with the announcement of a broad-based management shakeup that prompted several Wall St. firms to cut their price targets on the stock due to uncertainty regarding its leadership, execution, and morale. In the five-day period covered, Trupanion shares were down 18.9%, with losses from February highs topping 50%.
• Estimated short interest in SpringWorks Therapeutics (SWTX) slipped to a six-month low of 24.3% late last week as shares saw their lowest level of the year, though the bearish activity returned to more “normalized” level seen over the past month, rising nearly to points to 26.2% by Thursday. News-wise, traders’ reaction to the company’s presentation of updated clinical data from a Phase 1a/1b study of BGB-3245 in adult patients with advanced or refractory solid tumors harboring MAPK pathway aberrations has been muted, and the stock ended the five-day period through Thursday down 6.6%.
• Ortex-reported short interest in Verve Therapeutics (VERV) has also hit its lowest level of the year last week around 27.5% before a correction higher to 29.8% – the highest level in one month but well within the recent ranges. The stock marked its low point of the year earlier this month on April 4 before a timely bullish research note from Canaccord lauding its cutting-edge gene-editing technology with potential peak sales of greater than $5B for lead programs VERVE-101 and VERVE-201 renewed buying appetite. Verve shares ended the five-day period covered through Thursday up 1.0%.

SHORT INTEREST DECLINERS

• Ortex-reported short positioning among the crypto-verse names has been demonstrably less tactical and more reactive. Case in point, activity in MicroStrategy (MSTR) – profiled last week for its rising bearish interest to 41% of free float in concert with a breakout in bitcoin prices above $31,000 – has retrenched this week to 27% as crypto prices caved and bitcoin retreated below $28,000. Likewise, MicroStrategy shares were bid higher by nearly 20% last week but pared all of those gains with a 14% loss in the five-day period through Thursday. Short positioning in other stocks in the crypto space tracked by this column was also modestly lower, with that of Coinbase (COIN) and Marathon Digital (MARA) both down about a point to 20% and 26% respectively.
• Estimated short interest in Revolve Group (RVLV) reached a 10-week high of 24.5% on Monday but had then receded to a one-month low of 22.4% by Thursday as the stock approached its lowest levels of the year. The news on Revolve has been sparse yet the trading volume has been relatively active, particularly on down days. In the five-day period covered, shares were off by 9.3% through Thursday.

Keywords: Short selling, short interest, days to cover, securities, lending, utilization, sentiment analysis