MiniMed's short interest soars to 99% of float on swap offer

A peculiar situation emerged on the Nasdaq exchange yesterday, with data provider Ortex estimating that 99% of MiniMed Group Inc.'s publicly traded shares had been sold short.

Unlike purchasers, short sellers borrow shares to sell initially, expecting to repurchase them at a cheaper price to settle their loan for a gain.

MiniMed's short interest jumped to an extremely high level yesterday, climbing from 47.6% on September 15 and 77% a week prior, with short sellers borrowing and selling nearly the full float—all shares tradable on Nasdaq.

Ortex focuses on real-time short interest estimates for listed firms. It refreshes its figures each day using securities lending data, frequently preceding the official bi-monthly exchange reports by days.

Based on Ortex's securities lending figures, loans of MiniMed common stock almost matched the entire float as of yesterday, with only 0.08% of short interest available to borrow.

Swap offer set to expire on Friday

The explanation for this unusual situation starts with Medtronic, another public company that originally developed MiniMed.

MiniMed was formerly Medtronic's diabetes unit until it was spun off in an initial public offering in March 2026.

As of September 14, Medtronic continued to hold 90% of MiniMed and proposed a tax-free swap of 225.3 million MiniMed shares (ticker MMED) for Medtronic shares (MDT).

While Medtronic's float has 1.28 billion shares—enough to accommodate the conversion without disrupting trading—MiniMed's float comprises only 28.5 million shares.

Put simply, Medtronic's exchange offer is seven times the size of MiniMed's total available shares.

The conversion is not one-to-one; Medtronic imposed a maximum of 4.5939 MiniMed shares for each Medtronic share.

Nonetheless, 225.3 million shares still exceed MiniMed's float.

The offer is set to expire at midnight Friday if not extended, meaning yesterday was the deadline to act.

Medtronic, as the parent, created and holds most of MiniMed's shares. The float began trading publicly when Medtronic sold 28 million shares in MiniMed's IPO.

Medtronic retains the remainder: another 253 million restricted MiniMed shares.

Arbitrageurs short 99% as Medtronic controls the shares

This setup is a classic arbitrage situation.

This week, prior to Friday's cutoff, investors could purchase Medtronic shares, submit them to accept the offer, and short the MiniMed stock they anticipate receiving.

Given Medtronic's size and credibility, the deal is nearly certain to happen. The sole challenge was predicting how near the conversion ratio would get to the 4.5939:1 cap.

Barron's noted on October 2 that MiniMed had fallen roughly 12% from the night before the Medtronic offer, attributing the decline to selling by arbitrageurs.

The math is straightforward. Since a smaller amount of Medtronic shares can purchase a larger amount of MiniMed shares, that small difference in value is the arbitrageurs' reward.

Ondas investors blame short-sellers, fails-to-deliver