Ondas Fails to Deliver: Short Sellers Blamed for Stock Manipulation

Ondas, a defense drone company partnered with Palantir, has become embroiled in a heated debate over short-selling and manipulation. The stock topped the US fails-to-deliver leaderboard in August, with a high short interest of 40.9% of its float.

According to SEC data, on the Monday after Ondas' quarterly earnings, 20,954,097 shares of ONDS, the company's Nasdaq-traded common shares, sat undelivered in the National Securities Clearing Corporation's Continuous Net Settlement system. This number is visible because the SEC publishes all failures to deliver twice a month.

The high short interest in Ondas is somewhat peculiar given its strong financials, including $83.8 million of second quarter revenue and a raised full year revenue target above $525 million. Despite this positive news, the heavily-shorted stock has lost 22% of its value since the start of the year.

Fails-to-deliver might be indicative of short-selling issues, but the SEC cautions that they are not necessarily evidence of abusive short selling or 'naked' short selling. Ondas landed on the Threshold Security list due to five settlement days of fails-to-deliver above 10,000 shares and 0.5% of its shares outstanding class.