Apple Short Interest Surges 79%

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The deep concerns about Apple Inc. (NASDAQ: AAPL) may have driven a huge surge in its short interest. For the period that ended May 31, the number of shares sold short rose 79% to 99.7 million.

Apple’s short interest size now ranks it third among all stocks traded on Nasdaq. It had been out of the top 10 for some time.

Shorts may get burned. Apple’s share price is up 6.9% over the past month to $99. On the other hand, it is off 5.3% year to date.

Part of the recent news that has helped Apple’s share price is a new revenue sharing plan for app developers who market in Apple’s App store:

The company said Wednesday that it would implement a series of changes to its App Store, including allowing more apps to charge customers via subscriptions. Apple AAPL, +0.72% also said it would start running ads with App Store search results.

MarketWatch said of the App Store changes:

The moves address complaints from developers who have said it was difficult for smaller, independent apps to get noticed among the millions in the App Store and it was hard to support some types of apps, such as those for workplace productivity, with only a one-time upfront fee. Previously, Apple limited subscriptions to certain categories of apps such as music-streaming services, news publications or dating services. Apple said it would now allow all apps, including games, to bill via subscriptions.

While newsworthy, the plan won’t move Apple’s revenue up or down. The company is too highly dependent on hardware sales, particularly of the iPhone.

If there is an announcement that will cause Apple’s shares to soar, it is the anticipated release of the iPhone 7, most likely in September. Most analysts believe it can only be successful if it changes the features of smartphones in general. The problem is that the technology for these devices is mature. So, what can Apple add to an industry that has hit a ceiling in terms of innovation?

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