Unprecedented short-selling tests Hims & Hers amid Novo Nordisk fallout

Hims & Hers (HIMS) stock bears are doubling down, piling into short positions even as the fast-growing telehealth brand expands globally.

“Short interest hits all-time record high,” wrote Jonathan Stern, who runs Hims House, a newsletter focused on the company.

As of June 30, short interest stood at a record 63.8 million shares, driven by legal fallout from the recent clash with Novo Nordisk, the pharmaceutical giant behind Ozempic and Wegovy.

As InvestorsObserver previously reported, Novo Nordisk terminated its partnership with Hims last month, accusing the company of misleading marketing and illegally mass-compounding semaglutide.

Despite the surge in short interest, HIMS shares dropped just 4.7% on Friday to $47.89, trading on unusually low volume, less than half its daily average.

Needham analyst Ryan McDonald recently downgraded the stock following the Novo fallout, joining a growing camp of skeptics.

But even without the Novo Nordisk fallout, a correction may have been overdue.

HIMS stock is still up 125% over the past year, and its $10 billion market cap has some investors wary of a pullback.

Management remains surprisingly quiet

One concern that’s adding fuel to the bearish case is the silence from Hims' leadership.

“Outside of Canada expansion, it's been radio silence,” Stern said, pointing to the lack of updates on litigation risk or broader strategic direction.

He believes this lack of clear communication is contributing to the stock’s recent downfall.

That Canada expansion refers to Hims’ plan to offer generic weight-loss prescriptions north of the border, which came shortly after Novo Nordisk’s semaglutide patent lapsed in Canada.

Stern says the next big test will be the company’s Q2 earnings in early August.

That report will feature Hims’ first forward guidance since acquiring U.K.-based Zava, plus updates on its testosterone replacement (TRT) and menopause therapy lines.

If results resemble last quarter, bulls will be quick to argue the thesis still holds.

In Q1, revenue jumped 111% to $586 million, and earnings came in at 20 cents per share, 4x the profit from the same period last year, and well ahead of Wall Street’s expectations.