Ondas, a stock at the center of a heated short-selling and manipulation debate, became Wall Street’s most failed-to-deliver security during the most recent SEC reporting period.
A failure to deliver occurs when a party responsible for delivering shares to complete a trade doesn’t deliver them. High fails-to-deliver rates are often fodder for debate about stock manipulation, especially when short-sellers fail to borrow and deliver the shares they sell, although innocuous explanations are far more common.
Ondas, a defense drone company that’s partnered with Palantir, has high short interest at 40.9% of its float. It also topped the US fails-to-deliver leaderboard in August.
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A year ago, for context, short interest was one-tenth of today’s figure, near 4%.
Short-selling bears are battling a devout group of bullish investors who claim the company is on a “generational run” from penny stock territory a couple years ago to its current, multi-billion dollar market capitalization.
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Ondas stock fails-to-deliver
On the Monday after the company’s most recent quarterly earnings, a concerning 20,954,097 shares of ONDS, the company’s Nasdaq-traded common shares, sat undelivered in the National Securities Clearing Corporation’s Continuous Net Settlement system.
No stock in America failed to deliver more shares that day.
That number is visible because twice a month, the SEC publishes all failures to deliver. In its newest disclosure, covering the second half of August, Ondas out-failed every other security in the country.
The high short interest in Ondas is somewhat peculiar given that the company reported $83.8 million of second quarter revenue, more than 13 times its Q2 2025.
The company also raised its full year revenue target above $525 million with plenty of government contracts.
Despite all of this positive news, the heavily-shorted stock has lost 22% of its value since the start of the year. Over the last 12 months — i.e. after the stock rallied 10x from pennystock territory — the stock has not gained any value.
Fails-to-deliver might, in rare circumstances, be the fault of short-sellers who didn’t properly borrow stock prior to selling-short, but no one may interpret failures-to-deliver as necessarily indicative of naked shorting.
Indeed, the SEC cautions, “fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or ‘naked’ short selling.”
Five settlement days of fails-to-deliver above 10,000 shares and 0.5% of a company’s shares outstanding classifies a stock as a Threshold Security.
Ondas landed on that list on August 18 and stayed on it through August 27.