Katapult Is Primed, But The Target Is Unknown

When strategizing for siege warfare, the Greeks created a new machine to dominate and control the battlefield. The device was meant to kata (downward) pallō (hurl) large objects to achieve victory. While centuries have passed, short sellers have found their own Katapult - and it is primed for maximum payload.

Katapult Holdings KPLT regularly experiences an even volley between retail traders and corporate money makers. Nearly half of all daily volume is conducted within dark pools. Anyone interested in diving deeper into the dark pools will see approximately half of all KPLT trades are by short-sellers. According to Fintel, yesterday was a perfect example as 1,127,137 shares occurred within dark pools and of those 579,967 million were shorts.

Maintenance Faulters, Danger Looms

Shorts have now found themselves in a, particularly vulnerable spot. Allowing maintenance to get out of hand, shorts have found their Katapult investment is about to backfire into a painful failure to deliver threshold. Approaching 2.5 million shares the market can only offer approximately 1 Million shares for shorts to load up on per Ortex.

Utilization has surpassed 97% and costs to borrow hovers around 30%. The borrow fee rested at 24%. Total short shares exceed 12.8 million.

If retailers obtain the upperhand, there will be no retreat for shorts and they will be completely at the mercy of the same warriors who staged campaigns against Gamestop GME and AMC AMC.

Fog of War

It is not uncommon for Katapult to be associated with Affirm. In filings, Katapult comments how it finds itself in lockstep with Affirm when either company is approaching potential clients. This is underscored by the fact that Affirm actually has Katapult integrated into their platform (a.k.a. Affirm Connect) and provides instructions to developers regarding how to use respective identifiers when bringing services online.

Affirm focuses on a target audience of consumers above prime. Katapult focuses on subprime shoppers. Companies want an all-in-one solution. Everybody wins.

However, Affirm has recently made some very public moves with Amazon AMZN, Walmart WMT and Target TGT. While Keybanc reported Katapult could see windfall, not a single word about any equal partnership with the aforementioned empires has been uttered. What makes the situation even more interesting? There is a huge subprime audience open to all these commerce icons.

To add more mystery to the puzzle, despite being public knowledge for weeks now, Amazon has yet to establish a solid page of information regarding applying for Affirm. Instead sits a lonely hyperlink that goes nowhere.

Retailers Cry Havoc

Whether it be social media, Reddit, or other platforms, shareholders have become more and more restless with Katapult. Sentiment remains high, but fatigue is beginning to show. When news about Salesforce and Adobe partnerships broke over the past week, retailers widely celebrated. The shorts still held the might to clash against the share flux, though. Tired of waiting, some individuals who have been holding for weeks to months are tiring of waiting for bigger news. 

On Twitter, Stocktwits and other forums, criticism of management and marketing have been growing. Retailers want the news - good or bad - about big commerce participation to be known now. Tags and direct comments to the company are met with silence. 

With earnings reports just around the corner, but calls coming due, it could easily be seen that voices of support could soon be growls of bears.

The battle is up for grabs

With factors of a short squeeze, high risk, high reward and organic supporters leading the way, $KPLT has the tension to launch itself to the moon. Or face down into the dirt. It all depends on the missteps of management and hubris of shorts.