Short Report: Rebound in Guess and GroupOn shares driving short-covering

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 2.9%, the Nasdaq Composite was up 2.9%, the Russell 2000 index up 7.0%, the Russell 2000 Growth ETF (IWO) was up 7.1%, and the Russell 2000 Value ETF (IWN) was up 7.1% in the five-day trading session range through Thursday, December 15.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Bluebird Bio (BLUE) had tracked in the 21%-22% range for about a month, but bears have broadened their positions from 21.5% to 25.5% in response to the company’s Lyfgenia update last Friday. Bluebird Bio did not receive a Rare Pediatric Disease Priority Review Voucher as part of the FDA review of the drug, while the safety information for Lyfgenia also included a boxed warning for hematologic malignancy, sending the stock down about 40% in the session While shares have rebounded somewhat, Bluebird Bio was still down 31.4% in the five-day period covered.
• Estimated short interest in Cava Group (CAVA), a Mediterranean themed fast-casual restaurant chain that IPO’d this past June, has continued its steady climb this week, rising over three percentage points to a new all-time high of 26.5%. The stock was up 22% in the five-day period through Thursday, helped in part by a bullish initiation from TD Cowen reflecting on the company’s “encouraging” new unit economics and portability that supports the management’s target of over 1,000 locations by 2032, though bears do not appear to be concerned. Exchange-reported short interest data is also showing a steep climb in bearish express, rising about four percentage points in a half-month span to 26.6% as of November 30.
• Birkenstock (BIRK), which came public in mid-October, has seen some outsized fluctuation in its estimated short interest, according to Ortex data. Short position as a percentage of free float was as high as 34% in the first week of trading and nearly matched that level in mid-November before slipping to a low of 24% in the first week of December. This week, the short positioning in the stock was up just over three percentage points to 28.4%, while days-to-cover on the name rose 30 basis points to 5.5, a record high, amid reduced trading volumes. Shares were up just over 5% in the five-day period covered, though the stock continues to trade above its IPO price of $46 per share.

SHORT INTEREST DECLINERS

• Ortex-reported short interest on Guess (GES) had reached a multi-year high of 37% last Wednesday, though with the stock advancing and now fully erasing the plunge that followed its guidance cut on November 21st, bears are finding less conviction in their thesis. Short position as a percentage of free float on Guess shares was down seven percentage points this week to 29.6%, the lowest level in about five weeks, while days-to-cover caved from 9.2 to 5.6. With no news reported on the name, Guess is being swept up in the market euphoria around the less hawkish Fed and increased bets on rate cuts coming next year. In the five-day period covered, the stock was up 7.5%.
• The decline in estimated short interest on GroupOn (GRPN) is also notable this week as it similarly tracks a rebound in the stock price following a set of disappointing developments and a sharp sell-off just last month. Shorts as a percentage of free float in GroupOn is down nearly five percentage points to 25.0%, the lowest level of the year. The stock had fallen 35% on November 10 as the company reported in-line Q3 results but guided light of estimates for Q4, though GroupOn shares have now erased well over half of those losses with no fresh fundamental developments. In the five-day period covered this week, the stock is up a marginal 1%.