The short position in Sun Microsystems (NASDAQ: JAVA) is moving up, For April 15, it jumped by 6.0 million shares to 33 million. The was the sixth largest move up among all stocks traded on Nasdaq.
The news is especially troubling for Sun because it already trades fairly near its 52-week low, changing hands at $15.49.
Sun still face one significant hurdle with investors. Revenue growth has been in the low single-digits the last two quarters. Analysts are looking for 3% sales growth for Q1. With the economy tight, there is some fair concern that the company may not even make that number.
Sun’s core line of business, servers, is an item which companies can often defer buying, especially if the purchase is for replacement machines and not additional units.
The short don’t think the quarter will be good. The current share price is saying that they are right.
Douglas A. McIntyre