Image Source: Redbox.com

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 down 3.8%, the Russell 2000 index was down 2.5%, the Russell 1000 Growth ETF (IWF) was down 4.5%, and the Russell 1000 Value ETF (IWD) was down 3.1% in the period range.

SHORT INTEREST GAINERS

• Estimated short interest in Redbox Entertainment (RDBX) has gone parabolic since early May, jumping from low 50% to mid-100% in the first half of the month and reaching a new record high of 224% this week – a 55 percentage point increase. Investors cheered the company having secured a new line of financing in early May, though the subsequent deal to be acquired by Chicken Soup for the Soul and the questions about the viability of financing involved has fueled volatility, attracting a wave of retail short-squeeze speculators.  In the five-day period through Thursday, Redbox was up 43%, with another 39% gain on Friday, when the stock was lifted to a prominent top spot in the Stocktwits mentions volume.
• Estimated short interest activity in Dillards (DDS) has matched volatility in the stock price over the past three week, with a steep decline in bearishness tracking the near-30% drop in shares in the week through May 27th. As the stock price rebounded last week, short interest was little changed, though the bears are once again nibbling on the name as more negative sentiment returns to broader market. Short interest as a percent of free float was up six percentage points above 22%, while the stock was up 1.4% overall in the five-day period covered.
• Shortsellers in Chewy (CHWY) had pared their bets going into the company’s blowout Q1 results last week, but after the 20% post-earnings jump, bearish appetite has resurfaced on our radar. The estimated short interest in Chewy as a percentage of free float was up five percentage points this week to 24% while the stock price saw its momentum fade, ending the week up 1.9% in the five-day period through Thursday prior to Friday’s 3.5% drop.
• Estimated short interest in Big Lots (BIG) was up seven percentage points this week to 35.2% - a record high – with days to cover also jumping nearly 150 basis points to 5.1, a 9-month high. Home décor focus at a value price has made the retailer a “pandemic-winner” as its stock doubled in price during 2020, but Big Lots shares have now declined 47% year-to-date and were down another 0.3% in the five-day period through Thursday, vastly underperforming the majority of the Discount Store group this year.

SHORT INTEREST DECLINERS

• Estimated short interest in GameStop (GME) was up for four consecutive weeks at a 15-month high of 29% as of last Thursday, but bearish appetite was dialed down this week and shorts as a percentage of free float fell over five points to 23.3%. Likewise, the days-to-cover ratio on the name was down 40 basis points at about 4.4. In the five-day period covered through Thursday, the stock is down 3.7% and volumes were down in the last two days of the week despite the broader market volatility, as Redbox appears to have taken over the pole position in the race by the Reddit army to pump up a heavily-sold antiquated story with a short-squeeze.
• GitLab (GTLB) had become a frequent mention in this column earlier this year as a prime example of recent IPO software names caught in the downdraft of growth stocks hit by the rise in interest rates. A much better than expected Q1 earnings report on Monday has sent short-sellers running for cover however, with estimated short interest in GitLab falling over eight percentage points to 12.5% - a one-month low. In the five-day period through Thursday, GitLab shares were up 9.5%.