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

Rocket Companies (RKT), Oscar Health (OSCR), and Hims & Hers Health (HIMS) are identified as highly susceptible to short squeezes, with each having over a quarter of their float sold short and low days to cover (ranging from 1.5 to 3.7 days). Despite significant short interest, these companies have shown strong recent performance—RKT is up 75% year-to-date and HIMS up 170% over the past year—creating a combustible setup for short sellers. The confluence of high shorting, limited liquidity for covering, and the potential for retail investor-driven momentum positions these stocks as particularly volatile and risky for bearish bets.

Analysis

Rocket Companies (RKT), Oscar Health (OSCR), and Hims & Hers Health (HIMS) exhibit market conditions conducive to a potential short squeeze. Each company has more than a quarter of its public float held in short positions, with RKT at 37%, HIMS at 35%, and OSCR just under 30%. This significant bearish sentiment is contrasted by strong recent stock performance, including a 75% year-to-date gain for RKT and a 170% gain over the past year for HIMS, creating a high-risk environment for short sellers. The low days-to-cover metrics—3.7 for RKT and a particularly thin 1.5 for OSCR—indicate that a sudden surge in buying pressure could force shorts to cover their positions rapidly, potentially fueling a sharp, upward price spiral. While HIMS has recently pulled back 25%, its brand recognition and history of defying bearish expectations make it a particularly volatile candidate in this setup.

Key Decisions for Investors

• Investors with a high risk tolerance could consider these stocks for tactical, momentum-based trades, as the combination of high short interest and low days-to-cover creates a catalyst for a potential squeeze.
• Given the extreme levels of short interest and significant recent price volatility, existing holders should be prepared for sharp price swings and may consider using options to hedge their positions or define risk.
• Short-sellers in RKT, OSCR, and HIMS face an exceptionally risky environment; the low liquidity for covering positions, especially in Oscar Health, necessitates close monitoring of trading volume and news flow for any signs of a squeeze.