Bayer’s stock is down 50% YTD, with short interest tripling post-earnings. Analysts now favor holds over buys. Similar patterns of sell-offs, spiking short interest, and rising implied volatility signal increased downside risk.

Bayer (BAYN GR) only moves 4% on earnings but fell 14% at the most recent earnings, now down 50% YTD.

Since the last earnings, the short interest has tripled since this.

The analyst coverage has shifted with half of the buys have shifted to holds, so that the hold is now the most popular category. The analyst ratings as the stock have fallen but the short position did not move until now. The analyst is ahead of the short.

Bayer is the 5th most shorted stock in the Eurostox.

Something similar happened in Jan 2024 with the stock down 10% and the short interest doubling.

In BAYN when the stock goes up the short interest goes down which is a momentum strategy. When the stock goes down the short interest goes up, shorting on the way down.

Just like the previous sell off and short interest spike, the option implied volatility has spiked.

In this manner the short interest and implied volatility both represent downside risk.

Bayer’s falling stock, rising short interest, and spiking implied volatility point to elevated downside risk. Contact us for more insights.

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