Apple Short Interest Drops Sharply

By Trey Thoelcke Updated Jan 13, 12:45PM EST · Published Feb 25, 7:15AM EST

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Apple Short Interest Drops Sharply — © Wikimedia Commons

The short interest in Apple Inc.’s (NASDAQ: AAPL) stock fell nearly 10% in the first weeks of this month to 57.25 million shares. That was for the period that ended February 12, and it followed a more than 3% drop in the previous period. In fact Apple has slipped out of the top 10 most shorted Nasdaq-traded stocks.

The pullback is odd given the ongoing negative sentiment about stock. Shares are down more than 18% in the past three months, and essentially flat in the past week as the broader markets have inched up again. Some investors must think Apple has bottomed or that it has become oversold. Its shares were up 150% over five years by mid-2015, which shows how much the stock has been punished.

Apple’s most recent earnings report showed a flattening of iPhone sales and only modest improvement in revenue:

Apple announced financial results for its fiscal 2016 first quarter ended December 26, 2015. The Company posted record quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion, or $3.28 per diluted share. These results compare to revenue of $74.6 billion and net income of $18 billion, or $3.06 per diluted share, in the year-ago quarter. Gross margin was 40.1 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 66 percent of the quarter’s revenue.

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iPhone sales were 74.8 million, just below an anticipated 75 million. Apple also forecast lower revenues for the current fiscal quarter, giving investors more to worry about and sending Apple’s share price lower.

In one survey of worldwide smartphone sales for the fourth quarter of 2015, Apple ranked second to Samsung, with 71 million units for a 17.7% share compared to 83 million units for 20.7% of the global market, respectively.

Rumor has Apple launching a new four-inch screen iPhone, the iPhone 5se, and a new iPad when it meets the press on March 15. But investors hoping for an iPhone 7 launch to jump-start the company’s fortunes will need to wait a bit longer.

And also seemingly odd is that, despite having over $100 billion in cash, Apple reportedly is preparing a massive benchmark note and bond offering, perhaps in excess of $10 billion.

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.