Short Report: Bears scale back on Celsius after blowout earnings

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 0.7%, the Nasdaq Composite was up 1.7%, the Russell 2000 index down 1.6%, the Russell 2000 Growth ETF (IWO) was down 0.9%, and the Russell 2000 Value ETF (IWN) was down 2.0% in the five-day trading session range through Thursday, November 9.

SHORT INTEREST GAINERS

• Estimated short interest on Stoke Therapeutics (STOK) jumped from 23.6% to 27.5% this week, the highest level since August 23rd, while days-to-cover on the name was up from 48.4 to a high of 53.5 – the highest level on record. The company reported Q3 results on Tuesday with a smaller than expected earnings loss, while its CEO remarked that Stoke’s “recent data analyses from studies of STK-001 showed substantial and sustained reductions in convulsive seizure frequency among patients with Dravet syndrome who were already receiving the best available anti-seizure medicines.” The stock was up over 12% the day after the earnings report and ended the week up 10%, sparking the increase in bearish positioning.
• Estimated short interest on Ebix (EBIX) has spiked again as the stock continues to freefall. Shorts as a percentage of free float were up from 37.9% to 41.1%, a record high, while shares fell another 39% in the five-day period covered. The company filed a NT 10-Q due to a delay experienced in completing its disclosures as its Credit Facility matured at the end of and its currently in a forbearance period until November 15, with the management also indicating that its net income will be adversely affected by non-operating costs associated with increased lender interest and adviser costs. A downgrade from Craig Hallum this week expressed uncertainty whether Ebix gets additional time from the lenders or whether the lenders decide to put the company in bankruptcy.
• Ortex-estimated and exchange-reported short interest on Revolve Group (RVLV) carved out a bottom in mid-August and has since been trending higher, even as the stock remained under pressure and put in a low for the year in late September. This week, shorts as a percentage of free float on Revolve rose another two percentage points to 29.4% and days-to-cover rose 90 basis points to 8.2, a four-month high on both measures. The company had reported a Q3 earnings miss and cut its gross margin outlook for the year on November 1st, though the stock saw little downside on the result, having already declined 33% in the three months since reporting Q2 results. In the five-day period covered through Thursday, Revolve shares were down 1.8%.

SHORT INTEREST DECLINERS

• Estimated short positioning on energy drink maker Celsius Holdings (CELH) has fizzled out this week, dropping from about 22% to 18% – the lowest level of the year. Bears have been spooked by the company’s robust Q3 earnings beat and above-consensus record revenue levels that doubled from Q3 of last year. Citing IRI data, Celsius also disclosed that it is now the #3 Energy Drink in the US with a 10.5% market share, more than doubling its 4.4% share in the same time period last year. The stock was up about 7.5% in the five-day period through Thursday, and has now racked up about 65% in gains from the start of the year.
• Estimated short interest on online insurance provider Lemonade (LMND) had spiked to 2023-highs of 28% as of last Friday, tracking the outsized gains in the stock price following the company’s better than expected Q3 results and raised FY23 guidance. With shares off by over 20% from those post-earnings highs however, bears are also squaring their bets, reducing the short positioning from 27.6% to 23.5% as of this Thursday – the lowest level since September 29. In the five-day period covered, Lemonade shares were down about 7%, with another 5.5% in losses coming on Friday despite the broader market rally after the company took advantage of the recent stock jump with a mixed shelf offering announced on Thursday.