Palantir Technologies Inc. (NASDAQ:PLTR) has become the single biggest pain point for short sellers in a market rally that is squeezing bears across the board, according to new data from S3 Partners.
The firm tracks a basket of stocks that score 70 or higher on its 0-100 squeeze scale, meaning conditions are ripe for shorts to get forced out of their positions. Twenty-four names currently qualify for that basket, and the cohort has climbed 13.4% month-to-date, pressuring short sellers across the board.
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Palantir’s Outlier Position
Short interest in Palantir now totals $12 billion. That’s the largest dollar short in the basket and well above its $3.37 billion average. The stock is also the group’s biggest gainer, up 41.4% month-to-date. It carries the largest mark-to-market loss for shorts at $5 billion.
Benzinga’s short-interest tracker shows bets against Palantir have generally kept growing even as the stock climbs, adding to those unrealized losses. Yet the position covers just 3% of float, leaving the stock with the lowest crowded score in the basket at 32.5.
Few short sellers are involved, but those involved picked the wrong side.
Mark-To-Market Losses Mount
Recent mark-to-market losses across the basket total roughly $15 billion, and close to two-thirds of that sits in just three names. Palantir accounts for $5 billion, followed by Lumentum Holdings Inc. (NASDAQ:LITE) at $3.1 billion and Super Micro Computer Inc. (NASDAQ:SMCI) at $1.3 billion.
All three are also the basket’s biggest movers, each up more than 34%.
The Squeeze Score
S3 Partners builds its squeeze score on top of a separate crowded score, which grades how tightly packed a short position is using short-dollar size, stock loan liquidity, trading volume and short interest. The squeeze score then layers on rising stock-borrow costs and mark-to-market losses, since those factors typically force short sellers to cover.
Palantir’s pain fits a broader pattern across the basket, where the average squeeze score now sits at 80.8.
Fox Corp. (NASDAQ:FOXA), Workday Inc. (NASDAQ:WDAY) and Super Micro all hit the maximum reading of 100.
Leon Gross, S3 Partners’ director of research, summed up the dynamic: a rising market acts like the tide, lifting all boats — and every squeeze score with them.
The Most Crowded Shorts
Charter Communications Inc. (NASDAQ:CHTR) and Fox carry the heaviest crowding scores, at 85 and 80, followed by EchoStar Corp. (NASDAQ:ECHO) and Skyworks Solutions Inc. (NASDAQ:SWKS) at 77.5 each, against a 62.0 average.
Benzinga’s tracking shows Charter Communications’ short interest at 50.40% of its float, the heaviest in the basket.
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