Shares short in Microsoft (MSFT) rose 4.3 million to 98.8 million in April. It may be that the concerns about Vista will be worth the bet. The stock was over $31 early in the year, but comments by Steve Ballmer to the effect that Vista sales were fine but not explosive took the shares down to below $27.

With its stock still below $29, MSFT has to demonstrate that Vista is beginnning to help its large OS and server software businesses. Results from its internet unit are likely to be poor. MSN continues to fall behind in search. Xbox figures should be good, but the numbers are not enough to have much weight against the overall topline.

Without a decent showing in software sales and strong guidance based on Vista, the shorts may have a good pay day.

Douglas A. McInytyre