After one of the most brutal Decembers for stock investors in many years, we turned the calendar page on a new year. While the volatility did not go away, the markets have seen some solid gains since the Christmas Eve lows. Judging by the most shorted stocks traded on the New York Stock Exchange between the December 31 and January 15 settlement dates, those sellers were looking for direction, as the short interest moves were mixed and mostly mild.
The stock at the top of the list, Chesapeake Energy, bucked the trend with another sizable increase in the number of its shares short during the two-week period. On the other hand, Bank of America and Ford led the short interest decliners in that time.
Note that the five most shorted NYSE stocks had more than 115 million shares short at the end of the most recent settlement period. In fact, all but one of the top 10 had short interest of more than 100 million shares.
> Shares short: More than 222.63 million
> Change from prior period: +21.1%
> Percentage of float: 24.9
With the second such surge in the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short, this oil and gas company affirmed its spot at the top of the list. The last time short interest was more than 200 million was last April. At the posted daily average trading volume on the latest settlement date, it would take about four days to cover all the short positions.
Chesapeake released preliminary 2018 figures during earlier this month and investors were pleased. Its share price rose more than 40% in the two weeks, much of that gain coming after the announcement. The S&P 500 saw a gain of around 6% in that period.
The stock has retreated since the settlement date, and it ended Friday at $2.78 a share. That still is more than 32% higher year to date. Shares have changed hands as high as $5.60 and as low as $1.71 in the past year.
> Shares short: More than 151.27 million
> Change from prior period: −0.5%
> Percentage of float: 1.8
General Electric Co. (NYSE: GE) stayed into second place despite little change in the number of its short shares in the initial two weeks of this month. Note that the prior figure was the highest level of short interest since last March. The daily average trading volume shrank somewhat during the latest period, but the days to cover remained at less than one.
GE was one of several companies that seemed to be struggling to survive in 2019. Yet, the shares ended the two weeks more than 16% higher, though it had been up more than 20% earlier in the period. In the first two weeks of this year, the Dow Jones industrial average rose about 5%.
GE’s shares were last seen trading at $9.16, which is up from a multiyear low of $6.66 reached last month. The 52-week high, from almost a year ago, was $16.43 a share. The stock has gained about 21% since the beginning of 2019.
> Shares short: More than 139.28 million
> Change from prior period: +2.2%
> Percentage of float: 24.2
That modest gain in the number of its shares short was enough to lift Snap Inc. (NYSE: SNAP) into third place on the list. And it was the highest level of the social media and camera company’s short interest since November. At the mid-month daily average trading volume, it would take about nine days for investors to cover all short positions.
The stock was downgraded by Goldman Sachs and others but upgraded by Cowen in the first two weeks of this month. The shares ended the latest settlement period more than 19% higher, though they pulled back immediately afterward.
The shares were last seen changing hands at $6.40. That compares to the 52-week low of $4.82 reached a little more than a month ago. The 52-week high, seen almost a year ago, was $21.22 a share. The stock now is up around 16% year to date.