Cyber security firm Crowdstrike Holdings Inc (CRWD) is up +125% for the year as spending for IT security continues as “stay at home” workers creates more personal and corporate demand for its products. This meteoric rise has not escaped the roaming eyes of short sellers and they have increased their shares shorted by +85% during this rally. CRWD short interest is $1.09 billion; 9.70 million shares shorted; 6.62% of its float. CRWD is now the 6th largest short in the Software Systems Sector.
CRWD short selling has returned after a short squeeze in early July, shares shorted has increased by 1.07 million shares, worth $120 million, over the last 30 days, Over the last week short selling accelerated into CRWD’s rally with 685 thousand shares shorted, worth $77 million, an 8% increase in shares shorted during a +12% price move by the stock.
CRWD short sellers are down -$376 million in year-to-date net-of-financing mark-to-market losses but are up +$8.2 million so far in August, including +$4.5 million on today’s -0.42% price move. With short sellers up for the month of August the threat of a short squeeze has decreased, but as we saw in July, there seem to be a good amount of short sellers with accumulated mark-to-market losses that have itchy trigger fingers and ready to buy-to-cover if CRWD’s stock price heads further north.
We see continued short selling in CRWD as its stock price remains at or below the $115 price range, but it remains a strong short squeeze candidate if the stock price rallies higher. Short sellers are down -75% for the year, more losses will trigger a short squeeze in the short sellers with either less conviction or deep red numbers in their Profit & Loss reports.
Looking at short selling trends over time provides insight into overall market sentiment as well as the strength of bearish conviction in individual equities. Our Blacklight SaaS platform and Black APP provides an up to date view of short selling and short covering on an equity, sector, index, or country-wide basis allowing investors\traders to better manage their existing long and short positions.
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