Shares in Ocado, the online grocery delivery platform, soared +44% to fresh record highs on news of another licensing agreement, this time with Kroger, which would allow the US supermarket giant to use Ocado software to strengthen its own grocery-delivery network. Kroger will, of course, pay licensing fees to use Ocado platform. Interestingly, however, it will also take a 5% stake (new shares); the first time this has appeared in an Ocado partnership agreement.

The positive share price reaction is as much a factor of Kroger’s US grocery market dominance, as being hot on the heels (and after a great deal of waiting) of similar deals in Sweden (ICA, 2 May 18), Canada (Sobeys, 22 Jan 18) and France (Casino, 28 Nov 17). After 4 and 6 months, shareholders will quite rightly be asking whether there are more in the pipeline. That said, exclusivity deals in both the US and Canada now put to bed further negotiations in North America.

Evidently, this is great news for the bulls, who have waited several year for these valuable partnership deals to transform the company’s prospects. It’s another blow, however, for the 7.2% who remain resolutely bearish, some of whom are surely rushing for the exit (buying to cover their short positions), contributing to the share price jump.

Even though Ocado remains the #13 most shorted stock, according to FCA disclosure rules, this is an improvement over its position in July 2016, when it was the most shorted stock with 21.37% of shares out on loan and 16% in November 2017, before the first deal came through and the company began proving the sceptics wrong.

The question now is how long the sceptics are planning to hold out. Whenever they give up their stance (when the next deal comes?), don’t forget they are going to have to buy to cover their short positions, potentially pushing Ocado stock even higher.

Artjom Hatsaturjants, Research Analyst at Accendo Markets