Already Crowded Nikon rallies 21% on Deal Announcement with Higher Short Interest.

Nikon (7731 JP) surged by 21% on August 26 after EssilorLuxottica, the maker of Ray-Ban sunglasses, announced plans to increase its stake in the company from 9 to 20%.

Short interest spiked by 15%, continuing a trend of gradual increases as investors shorted into the announcement. It now sits at 12.5% of float, a level of short interest data that reflects growing skepticism about the deal’s completion, which remains subject to government approval.

Crowded shorts are where risk accelerates. In Nikon, S3’s short interest analytics and crowded trade sentiment flagged the early climb in squeeze risk — not a forecast, but the start of pressure building. Investors tracking that shift could have managed exposure or leaned into the volatility before losses mounted, turning crowding from a blind spot into an edge.

The cumulative P&L for short sellers turned sharply negative, falling below breakeven as the stock rallied against their positions.

The stock was already crowded, with short interest above 11%, and the combination of rising price and additional shorting has driven the short squeeze score to 90, up from 55—the highest squeeze score in the Nikkei, according to S3’s short interest analytics.

Analyst sentiment remains bearish: 25% have sell recommendations, while only 16% rate the stock a buy—a figure that was halved last November.

This example highlights the risk of shorting crowded stocks—especially when short interest analytics, crowded shorts data, and crowded trade sentiment point to elevated short squeeze risk. With short interest data feed, this situation could have been anticipated—or avoided altogether.

There’s no current indication of an active short squeeze, as short sellers have not covered—instead, they’ve increased their positions, according to S3’s short-selling sentiment data.

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