Rising Short Interest Intensifies Pressure on Redcare Pharmacy Shares

As holiday trading quietens, the backdrop for Redcare Pharmacy grows more tense. Recent regulatory filings reveal that several prominent hedge funds have increased their short positions, signaling a growing bet that the company's valuation will face further downward pressure.

Transparency notices published in Germany's Federal Gazette point to a speculative and strained environment surrounding the stock. Notably, two well-known institutional players are concurrently turning the screw on their bearish wagers.

According to the latest available data, Two Sigma Advisers, LP has significantly expanded its net short position. The fund's stake rose from 0.50 % to 0.60 % of the issued share capital. This move indicates either a stronger hedge against downside risk or a clearer conviction that the share price will decline further.

In a parallel development, Voleon Capital Management LP has also ramped up pressure. Confirmed data shows that on December 19, 2025, Voleon raised its net short position from 0.59 % to 0.60 %.

The broader context highlights a skeptical institutional stance:

• Overall Short Interest: Activity remains high, with approximately 14 % of the capital sold short.
• Market Trend: Significant players like Two Sigma and Voleon are increasing their commitments.
• Sentiment: Institutional doubt regarding the price trajectory remains pronounced.

The simultaneous buildup by multiple funds suggests a segment of the professional market anticipates not just a temporary weakness, but sustained structural challenges for the company.

Competitive Threats from a New Market Entrant

At the heart of this skepticism is the impending market entry of drugstore chain dm into the online business for prescription (Rx) and over-the-counter medications. Reports indicate dm plans to fulfill orders for the German market from the Czech Republic.

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This move directly targets Redcare's core growth driver in the e-prescription and digital healthcare segment. Investors fear dm's vast customer base and strong brand loyalty could swiftly shift market share and compress Redcare's profit margins.

From many investors' perspective, this anticipated "dm effect" caps the stock's potential for further upside. The competitive landscape is thus shifting from an online battle among specialists to a confrontation with a dominant omnichannel retailer.

Bond Repayment and Liquidity Demands

Financing developments are also adding to the narrative. On December 19, Redcare announced the repayment of its outstanding convertible bond 2021/2028, after bondholders exercised redemption rights amounting to €64.5 million.

While the scheduled repayment in January 2026 confirms the company's solvency, it also highlights a significant cash outflow. Concurrently, Redcare must continue investing in technology, marketing, and logistics to defend its market position against new rivals like dm. This dual burden of investment needs and repayment obligations aligns with the picture many short sellers are painting.

Technical Levels Under Scrutiny

As trading resumes after the holidays, the technical support level around €63.00 becomes a key focus. The combination of rising short interest from names like Two Sigma and Voleon, the foreseeable intensification of competition from dm, and the additional liquidity requirements creates a sensitive setup for the stock.

Increased volatility is likely in the near term. The critical factor for the future direction will be whether these pressures are already largely priced into the current share price, or if a failure to hold the €63 area triggers a move to new lows.