Short Report: Bears squeeze MicroStrategy as shares track bitcoin higher

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 1.9%, the Nasdaq Composite was up 2.8%, the Russell 2000 index was up 0.3%, the Russell 2000 Growth ETF (IWO) was up 1.3%, and the Russell 2000 Value ETF (IWN) was down 0.7% in the five-day trading session range through Thursday, February 8.

SHORT INTEREST GAINERS

• Shares of Bowlero (BOWL) spiked 16% after the company reported better than expected Q2 revenue before the market open this Monday, but the bears aren’t “buying it”, with estimated short interest on the name jumping from 92% to 101% – a new record high. Shorts as a percentage of free float has been rising steadily from below 50% since mid-September, and this week’s spurt reflects fresh bout of skepticism that outsized gains in the stock will not be sustained, according to Ortex data. In the five-day period covered through Thursday, Bowlero shares were up 33%, briefly hitting a 10-month high above $15 per share.
• Estimated short interest in Arcutis Biotherapeutics (ARQT) rose from 32% to 30% – the highest level since mid-September. Shorts as a percentage of free float on the name has been rising since the start of the year. The stock was down 14% in the five-day period covered in the wake of a $300M mixed shelf filed late last week, though it erased all of those losses with a 14% spike on Friday.
• Ortex-reported short interest in Cassava Sciences (SAVA) rose one percentage point to 32.8%, though the bearish positioning is well off the late-December highs around 38% and has largely remained within a 31%-34% band thus far this year. Days to cover on the name was up 90 basis points to 12.8, approaching three-month highs. The stock rallied by over 7% on Wednesday after the company reported top-line results of a two-year clinical safety study of simufilam, an investigational oral drug for the proposed treatment of Alzheimer’s disease dementia, while the five-day gains for Cassava Sciences shares amounted to 6%.

SHORT INTEREST DECLINERS

• Ortex-reported short interest in MicroStrategy (MSTR) had been rising since the start of the year, reaching as high as 25.2% earlier this week for a three-month high.  Cryptocurrency assets are back en vogue over the past three weeks however as the price of bitcoin jumped from about $38.5K on January 22 to over $47K on Friday. Shares of MicroStrategy rallied nearly 50% in that timeframe, and bears are fearful of more upside tension, with shorts as a percentage of free float falling from 25.2% to 23.2% this week. MicroStrategy went “parabolic” with a 16% jump on Thursday and another 10% rise on Friday, though for the five-day period through Thursday, the stock was up 17%.
• Estimated short interest on Birkenstock Holding (BIRK) is down notably for the second consecutive week, slipping from 25.2% to 21.5%. Shorts as a percentage of free float on Birkenstock is now down four of the past five weeks, with this week’s decline taking the short-sellers holdings to three-month lows. As discussed last week, shares have been in a sideways consolidation range since late November, and while the stock is off by 8% from mid-December all-time highs, Birkenstock traded up 2.8% in the five-day period covered this week.