HIMS shares are down -60% over the past year as enthusiasm around weight loss offerings has given way to legal uncertainty following Novo Nordisk’s lawsuit targeting “copycat” drugs. Despite the drawdown, active positioning remains meaningful on both sides of the trade.

Short Interest Shares have risen sharply:

Shares short have increased from 50.3M (28% float) to 77.5M (37% float), or +46%, hitting a fresh 52-week high in SI. The willingness to add bearish positions into the price weakness suggests active shorts have been executing a momentum strategy.

Short Interest Notional down due to price, not buy-to-covers:

Short notional exposure has fallen from $2.2B to $1.3B, or -68%. This has been driven primarily by the stock price decline, not a reduction in bearish conviction.

Battleground stock

Active Long Interest Notional of $1.5B versus $1.3B of Short Interest Notional results in a 1.15x L/S ratio. In fact, HIMS has been a Battleground stock for much of the past year, with the L/S ratio never breaching >1.50x.

Active Longs de-risking aggressively

The declining L/S ratio reflects a faster contraction in active long notional, while shorts have increased exposure via share count.

Bottom Line

Current highs in short interest measured in terms of both % Float and Shares increase volatility even further in a highly contested name. Next earnings call is scheduled on 2/23, where the options market is already implying a one-day move of +/-14% after the print.

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