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Most companies on Nasdaq did fairly well with the shorts in the period which ended on March 31 compared to March 14. The two tremendous exceptions were Level 3 (LVLT) where short interest moved up 20.3 million shares to 243.9 million, and Sirius (SIRI) were share sold short jumped 40.4 million to 137.8 million

In a tough stock market and credit environment, it is not hard to see why investors would place bets against both companies. Each stock trades near its 52-week low. Level 3 recently pushed out its president. Although it is in an attractive business, bandwidth infrastructure, it is a patch-work of M&A work with a large amount of debt and almost no cash-flow. In other words, a liquidation candidate in a deep recession.

Sirius is also hurt by a high debt-load, over $1.2 billion, and negative operating income. If the company’s merger with XM Satellite (XMSR) does not go through, it may not be able to survive as a standalone company either.

As a tip of the cap to the troubled airline industry, shares short in JetBlue (JBLU) moved up 7.1 million to 44.1 million.

For the majority of other big Nasdaq stocks, the news was better. Shares short in E*Trade (ETFC) dropped 14.1 million to 90.3 million, a signal that investors think the company’s discount broker operation can do well despite the firm’s mortgage balance sheet problems.

Shares short in Intel (INTC) dropped 12 million to 63.2 million. Short interest in Yahoo! (YHOO) dropped 8.5 million to 41.3 million. Microsoft’s (MSFT) short interest fell 4.7 million to 118.4 million. At Dell (DELL) short interest fell 3.7 million to 41.8 million. And at Cisco (CSCO) short interest was off 3.4 million to 69.7 million.

Investor willingness to take a stand against tech stocks is beginning to shrink.

Takeover target Take-Two (TTWO) had a dropped off in shares short of 5.5 million to 11.6 million. Some investors see the price offered by Electronic Arts (ERTS) going higher

Douglas A. McIntyre