A reverse split is the best friend of covered short interest. Naked short interest is the one affected by the cusip change. If there is a temporary rally as naked short interest covers going into an uplisting, once on the new exchange short interest waits out the rally and has a much higher SP to work with as well as availability of shares to borrow at lower interest rates. It’s those two conditions that make a R/S the best friend of shorting hedge funds and strategists. That peak rally point is also the reentry point for uncovered shorting that can include off-shore naked interest, the group represented by those twice monthly FINRA reports.
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