Rocket, Oscar, Hims & Hers: Short Sellers Are Playing With Fire

Wall Street's most crowded shorts are starting to look like powder kegs. Rocket Companies Inc (NYSE:RKT), Oscar Health Inc (NYSE:OSCR), and Hims & Hers Health Inc (NYSE:HIMS) are sitting at the top of the market's short-interest leaderboard, each with more than a quarter of their float sold short.

• Track HIMS stock here.

That's a risky setup in a market where meme stock flashbacks and retail-fueled squeezes are never far away. The trio's fundamentals tell different stories, but one common thread runs through them: short sellers are betting heavily against companies that have already shown they can defy expectations.

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Rocket's Ride, Oscar's Recovery

Mortgage lender Rocket Companies has been on a tear this year, up more than 75% year-to-date despite housing headwinds. With a market cap of nearly $40 billion and 37% of its shares shorted, the setup looks combustible. Days to cover sit at 3.7, meaning if momentum builds, shorts could find themselves scrambling to buy back shares quickly.

Meanwhile, Oscar Health has quietly been staging a comeback, up 25% this year after a rough 2023. Its short interest hovers just under 30%, but with only 1.5 days to cover, it wouldn't take much of a spark to ignite a squeeze.

Hims & Hers: The Wild Card

Then there's Hims & Hers, the telehealth upstart that has turned buzzworthy growth into a $9.7 billion market cap. The stock is up 170% over the past year, though it's pulled back nearly 25% this past month. That volatility hasn't scared away short sellers—35% of the float remains shorted. With its strong brand recognition, cult-like retail following, and a track record of confounding bears, HIMS may be the most dangerous short of the bunch.

For now, shorts are betting these names will cool off. But with high short interest ratios, thin covers, and retail traders sniffing around for the next squeeze, Rocket, Oscar, and Hims could easily flip from bear bait to firestorms. Short sellers beware: sometimes the hottest trades are the ones that burn.

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