The most visible shift in short interest in the new Nasdaq figures as of October 31, is the sharp increase in shares sold short in Microsoft.
From October 15 to the end of the month, the short interest in the world’s largest software company rose 23.9 million to 101.3 million, the largest increase of any company listed on the Nas.
After making a multi-year high late last month, the stock has sold off some, but not nearly to the extent that other Big Techs like Cisco (CSCO), Intel (INTC), and Google (GOOG) have.
Some on Wall St. may simple think that all the good news is baked into the stock now. It’s Vista launch has gone better than most thought it would, and PC sales in general continue to move up more than expected. The new version of Office has done well. And, after billions of dollars of loses, Redmond made money on its Xbox 360 unit for the first time last quarter, driven by the launch of its new "Halo 3" video game.
The only part of MSFT doing poorly is it online operation, lead by MSN. Based on results from Yahoo! (YHOO) and AOL, that is not going to change.
The company is probably operating as "perfectly" as it can now. Investors sense that, and don’t see what news could possibly take the stock up much from where it trades today.
Douglas A. McIntyre