Short Report: GroupOn bears refresh their bets as shares bounce

Short positioning on Groupon rises to three-month high after meme-stock rally, strong Q1 results drove 50% stock advance

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 down 0.6%, the Nasdaq Composite was flat, the Russell 2000 index was up 0.4%, the Russell 2000 Growth ETF (IWO) was up 0.6%, and the Russell 2000 Value ETF (IWN) was up 0.2% in the four-day trading session range through May 30.

SHORT INTEREST GAINERS

• Ortex-reported short interest in Groupon (GRPN) came down from about 21% to 18% in the week of May 13 after the company's Q1 results reported on May 9 – along with the upswell in meme stocks – contributed to a 60% jump in its shares. As the trading volume stalled and shares plateaued however, bears have re-emerged, pushing the short positioning as a percentage of free float to a three-month high of 22.7% this week – up four percentage points from last week. In the four-day period covered through Thursday, shares of GroupOn was down 3%, though the stock is still up about 50% from pre-earnings levels.
• Estimated short interest in Upstart (UPST) had similarly receded in the third week of May, slipping from 33% to a one-year low of about 30% by May 20 as shares reversed their initial post-earnings plunge on May 7 to rally 44% over the course of the next five trading sessions. With more than half of that surge having corrected over the balance of May, shorts as a percentage of free float have also normalized closer to the middle of 2024 range, rising to 34.7% this week. Upstart shares meanwhile were up about 5% in the four-day period covered.
• Ortex-reported positioning on Sirius XM (SIRI) shows the bears squaring their bets in the first four months of the year as short interest came down from 29% in January down to about 20% by the start of May while the stock has caved about 42%. Bears have resurfaced in May however, particularly this week, with shorts as a percentage of free float rising back up to 24% even though the stock fell another 10% in the month and has now fallen 50% year-to-date.

SHORT INTEREST DECLINERS

• Estimated short interest in Bowlero (BOWL) had broken a three-month-long downtrend in the wake of a disappointing Q3 earnings report on May 6, with bears pressing short positioning from 67% to 72% as shares fell as much as 22% the day after the results. Bowlero has filled that gap in the past four weeks however and the short-seller profit-taking momentum has been restored. This week, shorts as a percentage of free float was down from 71.8% to 61.6% while the stock traded up 2.5%.
• Ortex-reported short interest in iRobot (IRBT) had increased from about 10% at the start of the year to 35% by mid-March since Amazon.com walked away from buying the robot vacuum maker due to regulatory headwinds in Europe while shares had cratered by over 70% in that time-span. The stock had found some footing over the past couple of months however, gaining just over 20% from March lows, and bears are turning more keen to lock in profits. This week, short positioning as a percentage of free float was down about five percentage points to just over 22% – the lowest level since late January, while the stock traded down just 1%.

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Originally Posted June 2, 2024 – Short Report: GroupOn bears refresh their bets as shares bounce