Short Interest in Flotek Is Increasing: What Does That Mean?



Short interest in FTK

Short interest in Flotek Industries (FTK) as a percentage of its float is 24.2% as of January 6, 2017. That compares to 23.3% as of September 30, 2016. Since the end of 3Q16, short interest in FTK has risen 4.0%.

As you can see in the graph below, FTK stock and short interest as a percentage of float have largely been inversely related since September 30, 2016. FTK makes up only 0.03% of the iShares Russell 2000 (IWM).

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Implications of short interest in Flotek Industries

Short interest is the number of shares sold short, divided by the number of shares outstanding. A rise in short interest as a percentage of float, or a rise in short interest, indicates that more investors expect the stock to fall.

Since September 30, 2016, FTK stock has fallen ~35.0%, reflecting the rise in short interest. However, you should note that the market could go against investor sentiment. The share price could also rise when investors start buying the stock to cover their short positions.

Stock price movements for FTK’s peers

Since September 30, 2016, FTK’s smaller market cap peer Carbo Ceramics (CRR) stock has fallen 1.0%. McDermott International (MDR) stock rose 46.0% during the same period. Since September 30, Core Laboratories (CLB) stock has risen 11.0%.

Recently, FTK’s implied volatility has also been high. Let’s take a look at that next.


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