Shorts own 40% of SoundHound's float, and the only insider trades are sales

The squeeze case, in one number

Short interest in SoundHound AI reached 40.47% of the float on September 15↗: 165,088,496 shares sold short, up 5.24% from August 31, needing 6.95 days of trading volume to buy back ¹. Benzinga's squeeze-watch list↗ screens for stocks above 33% short interest, and SoundHound clears it by more than seven points ². The shares trade near $6.05 against a 52-week high of $22.17, on a $2.7 billion market cap ³. Almost seven days of forced buying is the entire bull thesis.

The ledger leans the other way

Goldman Sachs removed 3,985,092 shares in Q2 2026, 77.7% of its stake, an estimated $25.8 million, and Defiance ETFs walked from its entire 3,836,136-share position ¹. Across all filers, 260 institutions decreased their positions while 226 added ¹.

The counterweight ranks below both exits: Sixth Street added 3.5 million new shares, BlackRock 1.6 million ¹. Insiders were unanimous: eleven open-market trades in six months, every one a sale. Chief executive Keyvan Mohajer sold 263,830 shares for about $1.8 million; chief operating officer Michael Zagorsek sold 136,107 for about $0.9 million ¹.

The lawyers reopened the acquisition file

On September 25, Kahn Swick & Foti announced an investigation into whether SoundHound's officers and directors breached their duties to shareholders↗ ⁴. Its subject is the last acquisition spree: SYNQ3 and Amelia, bought in January 2024, left the company unable to file its 2024 annual report on time in March 2025 because of material weaknesses in acquisition accounting. The 10-K filed a week later restated financials, and a securities class action is still open↗ ⁴⁵.

The probe landed three weeks after SoundHound closed LivePerson↗, its fifth acquisition since going public in 2022 ⁶. The bill: $42.8 million to LivePerson's equity holders plus $261.2 million to retire its secured notes, roughly $304 million in total against a $43 million headline, per figures in the Q2 10-Q ⁶⁷.

Which tape decides it

The shorts' case is the debt and the declining business LivePerson brings, with an equity raise likely to finish paying for it ³. The bull case is 45% revenue growth to a record $61.9 million in Q2, the low end of full-year guidance raised to $230 million to $260 million ³⁶, and August's 16.8% post-earnings rally↗, a preview of what a real catalyst does to a 40%-shorted tape ⁸. A $42.8 million quarterly net loss keeps the profitability question open ⁹.

Days-to-cover is not a deadline; it is a queue, and the shorts in it are likely in no hurry, because the queue has no end date. Updated post-close guidance, due before year-end, is the next scheduled reading ⁶. Until a catalyst or a filing arrives, the squeeze buyer finances the wait, and the class action compounds it.