Short Report: Stitch Fix bears less skittish despite more sharp gains in stock

Short interest in Stitch Fix rebounds to two-month high despite renewed upward momentum in shares

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. As a basis of comparison for stocks discussed below, the S&P 500 index was up 2.9%, the Russell 2000 index was up 5.2%, the Russell 1000 Growth ETF (IWF) was up 4.9%, and the Russell 1000 Value ETF (IWD) was up 1.6% in the five-day trading session range.

SHORT INTEREST GAINERS

• Estimated short interest in Stitch Fix (SFIX) had started the year with two consecutive weeks of declines as the stock price had bounced about 50% from its all-time lows in late December to about $6 per share. The upward momentum has been sustained as growth stocks handily outperform value, but shorts have also turned less skittish in recent days. Ortex-reported short interest as a percentage of free float was up nearly two points to 21.9% this week, a two-month high, and days-to-cover on the name is seeing its highest level since early 2021, rising about 100bps to 3.7. While the stock traded down by 6% on Friday, in the five-day period covered through Thursday, Stitch Fix shares were up 27%.
• Estimated short interest in Janux Therapeutics (JANX) had dipped from its month-long 17%-19% range to a two-year low around 14% early last week in the wake of a 13G filing from EcoR1 Capital disclosing a 7.3% stake, but with little momentum from the initial stock price rally, bears have returned. This week, Ortex-reported short interest as a percentage of free float was up nearly four points to 18%. Janux Therapeutics shares was down less than 1% in the five-day period covered through Thursday.
• Ortex-reported short interest in Silvergate Capital (SI) had retreated from record highs of 83% to a 3-week low of 72% late last week and then dipped as low as 70.8% early this week, but the bears returned into the weekend, sending the short position as a percentage of free float to 74% into the weekend. The stock traded up by nearly 50% through Thursday, though the news of a DOJ investigation in the afterhours session saw Silvergate shares fall by over 20%. The stock ended Friday’s session off those lows, but still off by 10%.

SHORT INTEREST DECLINERS

• Estimated short interest in Dutch Bros (BROS) had risen from a nine-month low of 9% in late August to a six-month high of 25% in mid-January. The stock has had a very strong start to 2023 however, gaining nearly 40%, and the bears are taking notice. Ortex-reported short position in the name was down for the third consecutive week this week, falling nearly two percentage points to 20.8% – the lowest level in over a month. Days to cover on Dutch Bros were down 150 basis points to 8.4 – the lowest level in about three months. In the five-day period covered through Thursday, Dutch Bros shares were up 13%.
• Estimated short interest in Earthstone Energy (ESTE) spiked from 23% to a three-month high of 30% early last week and trading volumes rose with no impactful news flow, but has returned to its more normal range in low-to-mid 20’s this week. Short position as a percentage of free float was down over five percentage points this week overall to 25%, while the stock price has also pared some of the gains made during January, falling 12% in the five-day period covered.

Keywords: Short selling, short interest, days to cover, securities, lending, utilization, sentiment analysis, Silvergate Capital, Earthstone Energy, Janux Therapeutics, Stitch Fix, Dutch Bros