Short Sellers Attack Weakest Companies

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Short sellers moved into the shares of companies that Wall St. views as having weak earnings capacity and poor business strategies.

Shares sold short in AMD (NYSE: AMD), which recently pushed out its CEO, were up 10% to 64.9 million. The short interest in Sprint-Nextel (NYSE: S), which must compete with the iPhone franchises of AT&T and Verizon Wireless, rose 9% to 130.8 million. The short interest in AMR (NYSE: AMR), the parent of American Airlines, rose 37% to 38.2 million shares. AMR has been in a battle with online travel services about the booking of its tickets.

The short interest in Eastman Kodak (NYSE: EK) was higher by 18% to 45.8 million. Kodak recently reported poor earnings and lost an important patent battle. Shares sold short in JP Morgan Chase (NYSE: JPM) were higher by 110% to 6.5 million. The bank has been accused of knowing about the Madoff problems before the government sued the financier.

Shares short in three NYSE listed mega-cap companies fell during the period which ended on January 31. The short interest in Bank of America (NYSE: BAC) dropped 31% to 79 million shares. The short interest in Ford Motor (NYSE: F), now considered the most successful US car company, fell 6% to 180.8 million. The short interest in Verizon (NYSE: VZ), which will begin to sell the iPhone, dropped 27% to 40.1 million.

Among tech shares, surprisingly, Apple (NASDAQ: AAPL) shares short rose 50% to 10 million. There has been some concern that the stock has run up too far too fast and the the illness of Steve Jobs and risk about acceptance of new products could hurt perceptions of the firm.

Shares short in Intel (NASDAQ: INTC) rose 11% to 53.7 million. The short interest in Qualcomm (NASDAQ: QCOM) was higher by 20% at 30.4 million.

Data from NYSE and NASDAQ

Douglas A. McIntyre