Shares of CoreWeave (CRWV), the AI cloud computing startup, are up +287% since its IPO at $40/share back in March.

Bearish speculators have been short selling the stock relentlessly, despite having estimated mark-to-market paper losses of $1.6 billion as of June 10 close.

S3 Squeeze Risk hit the max level of 100 back on May 5 (when the stock was at $51) and has been at the 100-level for over 30 consecutive days in a row. Since then, CRWV shares are up +204%.

The elevated Short Interest % Float at 32%, the notional exposure of $2.2 billion on the short side, very high SI Utilization of 97%+, and lack of Availability on the borrow are among the key metrics driving a Crowded Score of 92.5 in the model.

The setup reflects a classic “crowded trade under pressure” with shorts “paying up” (i.e., >150% financing rate, more margin/collateral as shares rise) to stay in this painful position.

Anticipate demand from shorts to remain high as long as the stock trades at these elevated prices. The question is, can they hold out until IPO lockup expiry on Sept 24, when insiders are allowed to start selling their stakes, an upcoming catalyst for a correction.

Watch the CNBC segment bull vs bear case citing S3 Partners data on CRWV: Link

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