Short sellers pressed into tech and Internet stocks during the period that ended November 15, a gamble that consumer spending on and business investment in electronics products and IT are not nearly as robust as expected. Additionally, companies that may have trouble moving into the portable device market were attacked
The short interest in Microsoft Corp. (NASDAQ: MSFT) rose 11% to 109.8 million shares. Shorts built that position just as Windows 8 was launched, and at about the same time as PC companies released poor results based largely on the move of computing to smartphones and tablets. Shares sold short in Dell Inc. (NASDAQ: DELL) rose 12% to 57.6 million. Even Apple Inc. (NASDAQ: AAPL) was not immune. The short interest in Apple’s shares rose 28% to 21.6 million, a shock because Apple’s shares have done so extraordinarily well.
Internet stocks did not do much better, again perhaps because not all Internet companies have been able to move their PC-based models to smartphones. The short interest in Yahoo! Inc. (NASDAQ: YHOO) rose 22% to 32.7 million, despite the market’s positive reception to new CEO Marissa Mayer. Shares short in newer companies that rely on the Internet also rose. The short position in Facebook Inc. (NASDAQ: FB) increased 8% to 95.3 million. Shares short in Groupon Inc. (NASDAQ: GRPN) rose 21% to 43.5 million.
The corporations that have lost the hardware race in the smartphone industry also did poorly. Shares short in Seagate Technology PLC (NASDAQ: STX) rose 17% to 36.5 million. The short interest in Texas Instruments Inc. (NASDAQ: TXN) moved up 23% to 26.8 million. Shares sold short in RF Micro Devices Inc. (NASDAQ: RFMD) were up by 18% to 14 million. The short position in Silicon Image Inc. (NASDAQ: SIMG) grew 216% to 7.5 million
Another set of companies that Wall St. worries will not do well on portable platforms are those in the video game sector. The short interest in Electronic Arts Inc. (NASDAQ: EA) rose 10% to 19.2 million shares. Shares short in Take-Two Interactive Software Inc. (NASDAQ: TTWO) increased 11% to 18.2 million.
Data from Nasdaq and NYSE.
Douglas A. McIntyre