After showing caution in the previous month, short sellers seemed to be prompted into action again in the final two weeks of last month by the overbought markets, the political and geopolitical uncertainties and the rising concerns about a sizable market correction. Moves in the most shorted stocks traded on the Nasdaq were mostly upward between the May 15 and May 31 settlement dates.
Leading that trend was the world’s largest broadcasting and cable television conglomerate by revenue, with a double-digit percentage rise in the number of its shares short during the period to lift it into the top 10. On the other hand, bucking that trend for the second period in a row was a biohealth company.
Note that still only three Nasdaq stocks had more than 100 million shares short, as of the end of last month. However, two of them remain very far ahead of the pack.
After rising more than 5% in the previous period, the number of shares short in Frontier Communications Corp. (NASDAQ: FTR) added another 3% to more than 278.72 million as of the most recent settlement date. That was 23.9% of the telecom’s float, as well as the 19th consecutive period with more than 200 million shares short. The daily average volume dropped sharply, so the days to cover rose from less than five to almost eight.
During this latest period, Moody’s downgraded Frontier’s credit rating, due in part to weak operating trends. The share price rose about 14% but gave up almost all that gain during the latter two weeks of last month. The stock closed most recently at $1.23 a share, not much higher than the 52-week low of $1.19 hit in mid-May. The 52-week high of $5.22 was seen almost a year ago.
The almost 259.47 million Sirius XM Holdings Inc. (NASDAQ: SIRI) shares short by the end of May was around 3% higher than on the previous settlement date. Note that the number of shares short has grown in three of the past four periods, and the most recent figure represented 17.4% of the total float. As the average daily volume retreated, the days to cover rose from nearly 10 to about 11, the highest since March.
Warren Buffett remains an investor in Sirius, both directly and indirectly. The stock ended the final two weeks of the month nearly 10% higher, while the Nasdaq climbed less than 1% between the settlement dates. After hitting a 52-week high of $5.53 in March, the stock closed on Friday at $5.20 a share. The 52-week low of $3.74 was seen last summer.
By the conclusion of last month, Advanced Micro Devices Inc. (NASDAQ: AMD) had more than 158.58 million shares short. That was a gain of more than 8% from the total on the previous settlement date. It represented 19.0% of the company’s float, and it was again the highest level of short interest in at least a year. It would take about two days to cover all short positions.
At least one analyst late last month saw the AMD rally as all but over. While the May 31 share price was fractionally lower than on the previous settlement date, it was up more than 13% at one point in the interval. The stock closed at $12.28 on Friday, more than 7% higher year to date. Shares have changed hands between $4.30 and $15.55 in the past year.