What factors contribute to FLWS's current borrow rate of 2.73% for short sellers?

The borrow rate for a stock like 1-800-FLOWERS.COM, Inc. (FLWS) is primarily influenced by the fundamental principles of supply and demand within the securities lending market. A 2.73% borrow rate suggests a moderate cost for short sellers to maintain their positions.

Several key factors likely contribute to this rate for FLWS:

• High Short Interest % Float: FLWS exhibits a notably high Short Interest % Float, currently standing at 84.45%.1 This metric indicates that a substantial portion of the company's publicly available shares (the float) has already been borrowed and sold short. Such a high percentage points to significant existing demand from short sellers, which can tighten the supply of shares available for lending.
• Supply of Lendable Shares: While Fintel data shows 297 institutional owners holding a total of 36,682,550 shares,2 the high short interest percentage implies that the pool of shares readily available for new short positions may be constrained. When the supply of shares available to lend is limited, the cost to borrow those shares typically rises.
• Perceived Risk and Investor Sentiment: The borrow rate can also reflect the market's perceived risk associated with the stock and the overall demand to short it. A higher borrow rate often signals an elevated interest in betting against the company, or that lenders perceive a higher risk in lending out their shares, thus demanding a higher annual fee.

In summary, the 2.73% borrow rate for FLWS is likely a consequence of the considerable existing short interest, which limits the readily available supply of shares for new short positions, thereby increasing the cost for those looking to short the stock.