Shares of Applied Digital Corp (APLD) took a sharp dive in Thursday's trading session, plummeting 5.12% as investors reacted to news of a significant increase in the stock's borrow rate. The abrupt downturn has caught the attention of market participants, highlighting the challenges facing the company.

According to the latest data on liquid option names, Applied Digital's indicative borrow rate saw a substantial jump of 1.58 percentage points, reaching 9.55%. This marked increase in the borrow rate suggests a growing interest in short-selling APLD shares or an increasing difficulty for traders to borrow the stock for short positions.

The surge in borrow rates often signals bearish sentiment among traders and can lead to increased selling pressure. For Applied Digital, this development appears to have triggered a wave of selling, resulting in the stock's significant intraday decline. Investors and analysts will be closely monitoring the situation to determine if this is a temporary setback or indicative of broader concerns surrounding the company's prospects.