Anp🅰️nman
AST SpaceMobile Research
Merlin Labs' real-time short interest has hit an all-time high of 4.6M shares with the borrow rate still around 37%, building the supply setup further. Short interest has climbed steadily from 3.1M on May 21, even though PIPE holders became free to sell when the resale registration went effective April 17. x.com
Merlin Labs' PIPE investors are not selling even after the resale S-1 went effective on April 17. Real-time short interest did not collapse as unwinding hedges would imply, the borrow fee remains high at 37.4% with 3.2M shares short, and trading volume shows no discernible increase. The $80M stock-and-warrant offering placed with one investor on April 29 is not yet registered, and that investor may not sell either. x.com x.com
Merlin Labs shorts look set to get caught as borrowing costs hit records and options positioning tilts heavily bullish. Per @ShawarmaCapital, shorts took about 330,000 shares of borrow in 90 minutes as the fee jumped from about 45% to 110%, now around 140%, the highest ever for the ticker. June 18 open interest runs nearly 10:1 calls, with 6,955 at the $10 strike versus 1,177 puts at $7.50, while the stock is pinned at $8. x.com
Merlin could squeeze sharply because about 72% of the float is short in a low-float de-SPAC positioned in AI and military spending, two of the decade's biggest themes. The float should stay dried up until late May or June, raising the question of whether it can reach $30 or even $50. x.com
Merlin Labs common stock is in a death spiral toward zero because preferred holders and shorts hold the upper hand. Equity raises have no limit and the preferred ranks senior to the common, so fundamental analysis does not matter. @ShawarmaCapital, a former bull, attributes the fall from $17 to $1.81 to a roughly 44M-share unlock on a thin float, a Series A Preferred conversion reset on October 15 already headed for its $5 floor, and an unwinding short squeeze. x.com x.com
Merlin's finished Critical Design Review for its C-130J autonomy program with US Special Operations Command removes a big chunk of technical risk. It shows Merlin Pilot AI meets the performance, safety and airworthiness standards for one of the military's key transport aircraft, and the program moves to integration and flight tests. A $100 million-plus IDIQ ceiling and commercial runway in cargo and pilot shortages make it asymmetric, and high short interest adds explosive potential. x.com
Redwire's rally is losing its fuel as short sellers finish covering. @spacanpanman notes real-time short interest fell from 27.7M shares to 17.3M, including 10.4M covered in one day, after shorts pressed against AE Industrial Partners' sale of 15.3M converted shares on May 18 and the stock rallied 72%. x.com
Merlin was always highly speculative: buying a stock at 125x sales means accepting it could fall to 30x without any solid reason why it shouldn't. Its price spike came when it was being pitched like crazy on X. x.com x.com
Merlin is a 100x-or-bankrupt opportunity, too binary to invest in personally despite liking Merlin and Matt. Shield AI and Anduril are focused on defense right now, but it makes sense for them to go after the commercial sector eventually with proven tech, and more competitors are targeting cargo. The stock should rebound once high-beta names come back into favor. x.com
Merlin's long-term competitive moat is questionable, because companies like Anduril, Boeing or Lockheed Martin could build similar technology in-house instead of paying Merlin for it. The stock is a falling knife; a break of the downtrend would help, and landing a big new partner or contract could break the trend short term, but the long-term fundamentals remain the concern. x.com x.com
