Short Report: Bears feast on Root, reduce exposure in EV names

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 0.3%, the Russell 2000 index was flat, the Russell 1000 Growth ETF (IWF) was up 7.1%, and the Russell 1000 Value ETF (IWD) was down 0.5% in the period range.

SHORT INTEREST GAINERS

• Ortex-reported short interest in IGM Biosciences (IGMS) jumped to a six-month high this week, rising from about 29% to 37%. Days-to-cover on the name was up about 50 basis points to 5.0. The stock had hit a three-month low in the aftermath of its Q3 results and a $400M capital raise, though shares were bid higher and volumes increased following the news of insider buying late last week. Medivir (MVIR), which has an exclusive licensing agreement with IGM on birinapart, is also set to present at the Redeye Life Science Day next week. In the five-day period covered, IGM Biosciences shares were up 5.4%.
• Estimated short interest in Stitch Fix (SFIX) had slid to a four-month low of 21.7% but saw a five point jump on Wednesday and was up from about 22% to 27% to end the week – a three-week high that is also within two points of the highest level since early 2021. Days to cover on the name also rose just over 10 basis points to 1.9. Personal wardrobe styling specialist Stitch Fix has been one of the worst performing names in specialty retail, falling 80% year-to-date. The stock was also down 10.3% in the five-day period covered.
• Estimated short interest in Root (ROOT) jumped from 20.2% to 24.2%, the highest level in about three months. Days-to-cover on Root was up 30 basis points to 5.6, a one-month high. The DTC online insurance provider had reported Q3 results last week and also announced the resignation of its CFO, with subsequent sell-side commentary reflecting on its elevated cash burn and questioning its projections of reaching profitability by 2026. In the five-day period covered, Root was down 6% and has now lost 87% year-to-date.

SHORT INTEREST DECLINERS

• We have highlighted the reduced bearish interest in this name last week, but Ortex-reported short interest as a percentage of free float on GroupOn (GRPN) saw another instance of accelerated downtrend this week, slipping from 38% to 32% – a six-month low. Days to cover on the name is also down sharply again, falling from 7.5 to 6.3. The stock has pared some of its post-earnings report advance however and trading volumes have also receded notable. In the five-day period covered, GroupOn shares traded down 11%, and year-to-date, shares are off by 64%.
• Estimated short interest in electric vehicle names that are covered by our Ortex-driven screen has seen notable declines, even as the headwinds around regulatory challenges and tight competitive environment have been magnified by rising interest rates that are restricting their access to capital. Lordstown Motor (RIDE) has seen its bearish position fall three points to a 10-month low of 21.3% with a day-to-cover ratio slipping over 100 basis points to 10.5. Likewise, Fisker (FSR) short interest is down five percentage points to 30.1%, the lowest level in two months. In the five-day period covered, Lordstown was down 8.8% and Fisker was flat.