The Russell 2000 stock Coeur D'Alene Mines Corp (CDE) has seen a significant rise in the percentage of its Market Cap on loan (%MCOL) since late February this year - from 10% then to 23% today. Prior to this, the stock peaked at an all-time high of 40% MCOL on January 4th, making it one of the most heavily borrowed stocks of recent years with Utilisation at over 90%. Yet, despite the price fall - from $5 in March to $2 now, this is classic case of when short investors have 'got it wrong.'
You will see from this chart of CDE's %MCOL over the last year that short investors began to increase their positions in the stock as the price continued to rise - between August 2007 and February/March this year. As soon as the price started to fall; between March and May/June, short sellers then closed out their positions meaning that little profit was made. It is only in recent months that these positions have been increased again and some profits have been taken. Adding insult to injury, the Russell 2000 is more expensive to borrow than, for example, the S&P 500 because it is a small cap index and there is less stock available, so these misconstrued investments could have been extremely costly for certain companies.