Short Report: Bears bite into Krispy Kreme after another weak earnings report
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SHORT INTEREST GAINERS
Otex-reported short interest in Krispy Kreme (DNUT) continues to soar as its stock continues to sink following another disappointing earnings report by the company on May 8th. Shorts as a percentage of free float jumped five percentage points to a record high of 32.2, with days to cover also increasing from 5.1 to 5.8 despite the spike in trading volume post-earnings. The company missed on the top line in Q1, offered below-consensus Q2 guidance, and also pulled its FY25 guidance due to 'macroeconomic softness and the uncertainty around the McDonald's deployment schedule'. The stock was 8% in the five-day period covered through Thursday, but has fallen 33% overall from levels just prior to Q1 earnings and is now down over 70% year-to-date.
Shares of Rocket Companies (RKT) treaded water this week as the run-up in interest rates appeared to slow, though – as highlighted last week – the propulsion in Ortex-reported short interest on the stock is persisting despite the absence of pronounced pressure in price. Shorts as a percentage of free float on the stock was up another six percentage points to hit a four-year high above 44% and days-to-cover extended its increase by a decimal to 7.2. Shares, meanwhile, were down just 1.5% in the five-day period covered, and the year-to-date tally on Rocket is still a robust 13%.
Ortex reported short interest in Neurogene (NGNE) had trended largely sideways from the last week of April through the middle of May just shy of the 60% level, though this past week has seen a spike all the way up to 87%. Volume has receded, though days-to-cover on the stock slipped from 17.3 to 15.3. The stock has had a positive couple of weeks, with a higher thrust on May 15th as Baker Bros Advisors disclosed a 10% stake and then earning a higher price target from BMO after an oral presentation at the American Society of Gene and Cell Therapy annual meeting describing a monitoring / treatment algorithm intended to reverse hyperinflammatory syndrome hemophagocytic lymphohistiocytosis. In the five-day period covered, Neurogene was down 6.9%, though relative to its April 8 low, the stock has more than doubled.
Gains in Ortex-reported short interest in 1-800-Flowers (FLWS) have accelerated while the stock continued to track lower after reporting its Q3 results on May 8. Shorts as a percentage of free float rose sharply this week, increasing from 56% to about 67% – a record high. The stock, meanwhile, was up 2% in the five-period covered through Thursday, but including Friday's 4% loss, shares of 1-800-Flowers are now down 19% post earnings and 43% year-to-date.
Ortex-reported short interest on Madrigal Pharmaceutical (MDGL) receded from about 40% to a 10-month low below 32% and days-to-cover slipped from 6.6 to 6.1 as bears chose to book profits in the stock following this month's pullback. Madrigal shares slipped 12% over the 4-day period after its Q1 results on May 1 and are now down 20% from levels heading into those earnings, even though its loss was narrower than expected and several sell-side firms boosted their price targets due to strong Rezdiffra product sales. In the five-day period covered through Thursday, the stock was down 13%.
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