The overbought markets, along with political and geopolitical uncertainties and the rising concerns about a sizable market correction, prompted some short sellers into action again in the final two weeks of last month. Moves among the most shorted stocks traded on the New York Stock Exchange between the May 15 and May 31 settlement dates were mostly upward but also mostly modest.
One of the big three Detroit automakers stood out with a big upswing in the number of its shares short during the period. Bucking the trend though helped one of the world’s largest oilfield services companies slip from the top of the list and a long-suffering telecom to also slip down the list.
Note that the top six stocks on the list all had more than 115 million shares short at the end of the most recent settlement period.
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in nearly every period so far this year, and now it is the most shorted NYSE stock again. Short interest increased most recently by around 3% to about 167.05 million shares. That was 18.7% of the company’s float. At the most current daily average, it would take about five days to cover all the short positions.
Merrill Lynch downgraded Chesapeake earlier in the month, but was it justified? The stock ended the two weeks more than 9% lower, though it was up more than 3% at one point. The S&P 500 saw a fractional gain in that time. The stock closed most recently at $4.97 a share, which is around 29% lower year to date. Shares have changed hands between $3.93 and $8.20 in the past 52 weeks.
Weatherford International PLC (NYSE: WFT) slipped from the top of the list with about a 3% decline in the number of shares short in the latter two weeks of last month. That followed two double-digit percentage increases in a row. The nearly 157.61 million shares reported most recently was a retreat from the highest level of short interest in the past year, and it represented 16.2% of this oil and gas driller’s total float. The days to cover reading ended the period at around eight.
Weatherford stock has been in retreat since it posted a quarterly net loss at the end of April. Shares were down more than 8% in the two-week period, and they pulled back even further afterward. The share price was most recently at $4.46. That was up handily from the multiyear low of $3.73 from last November, but less than the 52-week high of $7.09 seen back in March.
The more than 150.45 million AT&T Inc. (NYSE: T) shares short on the most recent settlement date was around 6% greater than in the middle of May. It also was 2.5% of the float, as well was the highest level of short interest in at least a year. As of the latest settlement date, it would take about eight days to cover all short positions.
Rival Verizon recently outbid AT&T for the 5G assets in Straight Path Communications. In the final two weeks of last month, short sellers watched the share price pull back about 3% and then recover to end about where it started. The stock closed most recently at $38.79 a share, which was less than 9% lower than at the beginning of the year. The 52-week trading range for the shares is $36.10 to $43.89.