Ondas tops US fails-to-deliver list with high short interest

Shares of Ondas, which has been the subject of a contentious debate about short-selling and market manipulation, ranked first among US securities for fails-to-deliver in the latest SEC reporting period.

A fail-to-deliver occurs when the party responsible for delivering shares to settle a trade does not hand them over. Elevated fail-to-deliver rates often fuel discussions about stock manipulation, particularly when short-sellers have not borrowed and delivered the shares they sold, although benign explanations are far more typical.

Ondas, a defense drone maker that partners with Palantir, has a short interest of 40.9% of its float. It also led the US fails-to-deliver rankings in August.

A year earlier, short interest was roughly one-tenth of that level, near 4%.

Short sellers are opposed by a committed group of bullish investors who claim the company is on a "generational run", having climbed from penny stock levels a few years ago to a multibillion-dollar market capitalisation.

Ondas leads in fails-to-deliver

On the Monday following the company's most recent quarterly earnings report, 20,954,097 shares of ONDS, its Nasdaq-listed common stock, remained undelivered in the National Securities Clearing Corporation's Continuous Net Settlement system.

No other US stock had more shares fail to deliver that day.

The data is public because the SEC releases fail-to-deliver figures twice a month. In its latest disclosure, covering the second half of August, Ondas surpassed every other security in the country.

The high short interest in Ondas seems unusual given that the company reported second-quarter revenue of $83.8 million, more than 13 times its Q2 2025 figure.

The firm also lifted its full-year revenue target above $525 million, supported by numerous government contracts.

Despite these upbeat developments, the heavily shorted stock has lost 22% of its value since the start of the year. Over the past 12 months, after a tenfold rally from penny stock levels, the share price has not gained any ground.

In rare cases, fails-to-deliver may be due to short-sellers not properly borrowing shares before selling short, but failures should not be interpreted as necessarily indicating naked short selling.

Indeed, the SEC cautions, “fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or ‘naked’ short selling.”

A stock qualifies as a Threshold Security if it has fails-to-deliver above 10,000 shares and 0.5% of outstanding shares for five settlement days.

Ondas appeared on that list on August 18 and remained on it through August 27.