A Wall Street Bet Against Apple Rises

By Douglas A. McIntyre Updated Jan 12, 11:41AM EST · Published May 25, 5:22AM EDT

A Wall Street Bet Against Apple Rises — © https://www.flickr.com/photos/iphonedigital/

[cnxvideo id=”507121″ placement=”ros”]Short interest in Apple Inc. (NASDAQ: AAPL) shares rose 4.7 million to 49.9 million in the period that ended May 15. The negative bet on Apple’s share prices comes as its stock reached $153, very close to its all-time high.

Apple’s shares are up 32% this year. It continues to break its own records for market cap value. The figure stands at $800 billion. Several analysts expect that figure to reach $1 trillion within a year.

Apple was the 10th most shorted stock traded on the Nasdaq in the period.

Apple’s rise has been triggered both by strong earnings, and extraordinary expectations for the iPhone 8. The smartphone is expected to yield Apple $1,000 per unit, much higher than the industry average. Some analysts expect that in its September quarter, Apple will sell 44 million units of the iPhone 8.

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The primary reason to bet against Apple’s share price short term is persistent rumors that the iPhone 8 launch will fall after the traditional September iPhone unveiling. This in turn would undermine results for the balance of calendar 2017.

For its fiscal 2017 second quarter that ended April 1:

The Company posted quarterly revenue of $52.9 billion and quarterly earnings per diluted share of $2.10. These results compare to revenue of $50.6 billion and earnings per diluted share of $1.90 in the year-ago quarter. International sales accounted for 65 percent of the quarter’s revenue.

As for its forecast:

Apple is providing the following guidance for its fiscal 2017 third quarter:

revenue between $43.5 billion and $45.5 billion

gross margin between 37.5 percent and 38.5 percent

operating expenses between $6.6 billion and $6.7 billion

other income/(expense) of $450 million

tax rate of 25.5 percent

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.