MiniMed sees 99% of its float sold short ahead of Medtronic swap deadline

Short sellers flood MiniMed as swap deadline nears

An unusual trading situation appeared on the Nasdaq stock exchange on October 7, when data provider Ortex estimated that 99% of MiniMed Group Inc.'s tradable shares were sold short. That represents a steep jump from 47.6% just days earlier on September 15 and 77% a week before that. In a short sale, a trader borrows shares to sell them first, hoping to buy them back later at a lower price and keep the difference. By October 7, short-sellers had borrowed nearly every available share of MiniMed that trades publicly.

Key numbers behind the short squeeze

• Short interest: 99% of MiniMed's float as of October 7, up from 77% a week earlier and 47.6% on September 15
• Available shares to borrow: only 0.08% of short interest
• Medtronic-owned MiniMed shares: approximately 253 million restricted shares
• MiniMed's public float: 28.5 million shares
• Medtronic's float: 1.28 billion shares
• Conversion cap: maximum 4.5939 MiniMed shares per Medtronic share
• MiniMed's decline since the swap announcement: approximately 12%, according to Barron's

How the Medtronic swap works

MiniMed was originally the diabetes division of Medtronic before being spun off in an initial public offering in March 2026. As of September 14, Medtronic still owned about 90% of MiniMed. Medtronic launched a tax-free exchange offer allowing shareholders to swap 225.3 million MiniMed shares for Medtronic stock. The offer was set to expire at midnight on the following Friday unless extended. That deadline created urgency among traders. The swap is not a 1-to-1 exchange. Medtronic set an upper limit of 4.5939 MiniMed shares for each Medtronic share tendered. Still, the total number of MiniMed shares offered for conversion far exceeds the company's entire public float of 28.5 million shares.

Why traders went so short

The setup created what the article describes as a textbook arbitrage opportunity. Traders could buy Medtronic shares, submit them for the exchange offer, and simultaneously short the MiniMed shares they expected to receive in return. Since Medtronic is a large and established company, the trade was seen as relatively low risk. The main uncertainty was how close the actual conversion ratio would come to the 4.5939 cap. The small price difference between the two sides of the trade was the arbitrage profit. Barron's reported on October 2 that MiniMed's stock had fallen about 12% since the day before Medtronic announced its exchange offer, attributing the drop to selling pressure from arbitrage traders shorting MiniMed shares.

What is confirmed

Ortex's estimate of 99% short interest is based on securities-lending data and was published on October 7. The figure is an estimate and comes before the official twice-monthly exchange report. MiniMed's float consists of 28.5 million shares. Medtronic owns roughly 253 million additional restricted MiniMed shares. The exchange offer had a Friday midnight deadline at the time of reporting.

What is still unclear

Ortex's 99% figure is an estimate derived from lending data, not the official exchange short-interest report. It remains unclear whether the Medtronic exchange offer would be extended past its original deadline. The exact conversion ratio that would ultimately be applied to the exchange was not yet finalized.

Why this matters

When nearly all available shares of a stock are sold short, it creates a fragile trading environment. If something forces short sellers to buy shares back quickly, the limited available supply can push the price sharply higher. In this case, the short positions were directly tied to the Medtronic exchange offer, and most traders expected the swap to go through as scheduled.

Sources

• Protos