Short Report: Beauty Health, Petco short positions at multi-month highs

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 2.1%, the Nasdaq Composite was up 2.7%, the Russell 2000 index was up 0.2%, the Russell 2000 Growth ETF (IWO) was down 0.2%, and the Russell 2000 Value ETF (IWN) was up 0.7% in the five-day trading session range through Thursday, October 12.

SHORT INTEREST GAINERS

• Ortex-reported short interest position in Beauty Health Co. (SKIN) is continuing its gradual climb started in the final week of August, rising another three percentage points this week from 25.9% to 28.9% by Thursday. This week’s high of 29.0% was the highest since the first week of June. The stock has been under heavy pressure all year long and fell to its fresh 2023 lows this week, slipping 6.9% in the five day period covered through Thursday and another 3.6% on Friday. Shares of Beauty Health are now down 63% from the highs seen in April, and the stock is one of the worst performing names in the Personal Beauty Products category this year.
• Estimated short interest in Petco Health (WOOF) has been ascending rapid for just over a month, having rising from 2023 lows of 15.5% on September 11 all the way to this year’s high of 27.6% on Thursday, with this week accounting for about three percentage point increase. The stock had fallen sharply on August 24th when the company reported Q2 results and cut its FY23 guidance while attributing the revision to a “shift in consumer spending and pressures on our discretionary business”. More losses have ensued since, with Petco Health now down 9% in the five-day period covered through Thursday, down 52% since reporting earnings, and down 67% year-to-date.
• Ortex reported short interest in Ebix (EBIX) jumped from about 21% to about 25% in the last week of August and had been tracking in a sideways range of 23%-27% for the next seven weeks. This week however, shorts as a percentage of free float have broken out to new highs, rising from 25.6% all the way to 31.6% – the highest level since January of 2021. Trading volumes in the name have also picked up over the past two weeks as the company got booted from S&P SmallCap 600 index and then disclosed entering an agreement with lenders for a credit facility to be repayed in just one month. The stock has continued to careen to the downside, falling another 6.3% in the five-day period covered. Ebix shares are now down 80% from July highs.
• After slipping to 2023 lows in the first week of October of around 20%, the estimated short position on Marathon Digital (MARA) has recovered back toward the upper range of the past seven months, jumping from 22% to nearly 26% this week – the highest level in about three weeks. Likewise, days to cover continued its steep climb from 1.7 at the beginning of October to as high as 2.5 – an eight-month high. Shares of Marathon Digital were up about 5% this week through Thursday and gained another 3.4% on Friday, benefiting from bitcoin prices holding support around 26,500 and jumping some 300 points above 27,000 level heading into the weekend.

SHORT INTEREST DECLINERS

• Ortex-reported short interest on Guess (GES) lifted to within three percentage points of 2023 highs of 32.5% in the first week of October as shares fell to their worst levels in two weeks, rounding out an 18% correction from this year’s highs seen on August 31. This week however, shorts as a percentage of free float declined sharply from 28.8% to 20.3% – a five-month low. Guess shares were up 3.7% in the five-day period covered.