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Investing

Shorts Exit Weak Shares (EK, AMR, BP, LVLT)

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By Douglas A. McIntyre Published
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Short sellers moved out of stocks that have fallen recently. Perhaps they believe there will be a large rally in the market. There is little else to make the shares of companies with poor earnings and poor prospects rise.

Among NYSE stocks, the short interest in AMD (NYSE: AMD) fell 15% to 80.4 million shares. Shares sold short in embattled airline stock AMR (NYSE: AMR), the parent of American Airlines, dropped by 19% to 48.8 million. Rumors suggest the company may declare Chapter 11. Eastman Kodak (NYSE: EK) may also face bankruptcy. Shares short in the company fell 11% to 70.2 million.

Shares short in BP (NYSE: BP) were down 49% to 7 million. The short interest in struggling drug retailer Rite Aide (NYSE: RAD) dropped 11% to 61.1 million. Shares short in its competitor CVS Caremark (NYSE: CVS) were off 21% to 27.3 million.

In the medical sector, shares short in Boston Scientific (NYSE: BSX) were down 19% to 39 million. The short interest in Pfizer (NYSE: PFE) fell 10% to 79.3 million.

The same pattern of abandonment of stocks in weak companies held true for Nasdaq-traded shares. The short interest in Dell (NASDAQ: DELL) dropped 23% to 60.6 million. The short interest in Level 3 (NASDAQ: LVLT) fell 8% to 168.6 million. Shares short in News Corp. (NASDAQ: NWSA) dropped 9% to 51.8 million. The short interest in Cisco (NASDAQ: CSCO) dropped 6% to 80.7 million. Shares short in Affymetrix (NASDAQ: AFFX) fell 32% to 6.0 million.

Notable increases in short interest included troubled wireless broadband company Clearwire (NASDAQ: CLWR). Shares sold short in the company rose 15% to 47.8 million. The short interest in Southwest Air (NYSE: LUV) was higher by 15% to 25.2 million.

Short interest as of October 14. Data from NYSE and Nasdaq.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
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.

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