Short Report: Children’s Place bears undeterred by Mithaq Capital involvement

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 0.6%, the Nasdaq Composite was up 0.7%, the Russell 2000 index was up 4.0%, the Russell 2000 Growth ETF (IWO) was up 4.6%, and the Russell 2000 Value ETF (IWN) was up 3.6% in the five-day trading session range through Thursday, February 8.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Children’s Place (PLCE) shot higher this week, rising from 19.5% to 27.8% by Thursday, the highest level since early July, while days to cover on the name jumped from 0.9 to 2.8. The stock also rallied sharply mid-week when the company put out a shareholder update announcing that Mithaq Capital disclosed a 54% stake in Children’s Place shares, along with its intention to nominate a slate of board directors. Shares of Children’s Place had halved last Friday when the management cut its Q4 revenue outlook due to lower than expected merchandise margin due to heavy promotional activity, though the stock then reclaimed all of those losses, ending the 5-day trading period through Thursday up 25%.
• Estimated short interest in IGM Biosciences (IGMS) rose from 32.9% to 39.5%, an 8-month high, tracking the accelerated appreciation in share prices over the past four months. The stock has more than quadrupled since late October, marking gains of 19% in the five-day period through Thursday of this week with another 13% added on Friday. An RBC upgrade last Friday catalyzed the most recent rally, as the firm opined that the company’s strategic pivot towards its immunology and inflammation – I&I – portfolio and a particular focus on imvotamab was wise. The firm cited the anticipated data in the second half of this year for imvotamab in lupus and rheumatoid arthritis and from others in the field this year to further de-risk the approach of treating autoimmune disorders through B-cell depletion.
• Ortex-reported short interest in Arbor Realty Trust (ABR) had seen little variation since early December, tracking in a 31%-34.5% range, while the stock had lost 27% of its value from late December peak to early February lows. Shares have rallied 9% from last week’s Thursday lows however, tacking on another 6.6% on Friday in the wake of the company’s Q4 earnings beat, and shorts as a percentage of free float also rose notably from 32.6% to 38.6% – the highest level on record. Arbor Realty offers a hefty 12% dividend yield with ex-dividend date for the quarter approaching in two weeks, though the mortgage REIT was also a significant outperformer this week relative to its category.

SHORT INTEREST DECLINERS

• Shares of WW International (WW), or WeightWatchers, have shed two thirds of their value since early October highs – decimated by weight loss wonder-drug competition from the likes of Eli Lilly (LLY) and Novo Nordisk (NVO), whose GLP-1s have put WW’s business model under severe investor scrutiny and rewarded their investors. Short positioning as a percentage of free float on WW had also reached a record high above 25% in the first week of January amid the steep selloff in the stock. With the company set to report its Q4 results in the final week of February and with some analysts advocating for the company’s ability to preserve its category leadership, shorts are now reducing their exposure. This week, while the stock was down 12% in the five-day period through Thursday, shorts as a percentage of free float slipped from 23.7% to 17.8% – the lowest level since late November.
• Ortex-reported short interest in EV charging names had been on a steep incline for much of January, though with stock price declines abating, shorts are also paring their bets. This week, ChargePoint (CHPT) saw its short positioning fall from 27.2% all the way to 21.5% – roughly on par with late December’s six-week lows. Likewise, Blink Technology (BLNK) saw shorts as a percentage of free float slip from 40.7% to 32.8%, also the lowest level in six weeks. In the five-day period covered, shares of ChargePoint were up 7% while Blink Technology was up 27%.