Consumer Electronics

Apple Short Interest Surges by Over 14 Million Shares

Douglas A. McIntyre

Published: December 10, 2016 9:15 am

Last Updated: January 12, 2020 4:55 pm

A group of investors has increasingly bet that something is off at Apple Inc. (NASDAQ: AAPL). Shares sold short in Apple rose 14.4 million to 59 million in the period that ended November 30, an increase of 37%. Apple was the 10th most shorted Nasdaq stock for the period.

The cycle of mystery and speculation around the company has quickened, as well as coincided with the holiday consumer electronic sales season. Shares have not done much, up 4% in the past month, against a similar Trump rally improvement in the S&P.

The most recent rumors involve a delay in its new ear bud product. The Wall Street Journal says about the ear bud delay:

Three months after trumpeting the AirPods as a breakthrough technology, Apple still hasn’t made them available. The company says it needs time before the wireless airbuds are ready for consumers.

There have been more rumors about iPhone 8 prices, iPhone 6s battery leaks and flaws in the new version of iOS, according to Forbes. However, these rumors are no wilder than usual.

Most of the speculation about Apple continues to be about its primary revenue source, the iPhone 7. Holiday sales will set the tone about Apple’s prospects next year. Apple says it has to do well in China to do well at all.

Barron’s reports that China appears to be a weak spot:

Another day, another Apple (AAPL) iPhone warning.

Rosenblatt Securities’s Jun Zhang today reiterates a Neutral rating, and a $102 price target, warning that sales of the iPhone in China, he estimates, are “still weaker than retail channels” as discounting of the phone has popped up across the country.

iPhone sales, presumably in dollars, he doesn’t specify — fell by 6% in November, and are probably down “slightly” from November this month, as discounting takes hold outside of tight supplies at Apple’s online store:

Overall iPhone sales in China were down 6% in November and slightly down MoM in November due to some pushes in “single day” sales. In our view, iPhone 7 sales will continue trending down and many retailers in China have already started discounting ($50) the iPhone 7 in November. iPhone 7 Plus supply is catching up in November, and sales have grown MoM in November. iPhone 6/6S sales continue to be weak. The 7 Plus model currently accounts for 60% of iPhone 7 sales in China. We started seeing some retailers discounting this model in November.

Short interest data at the end of this moth may show some of the rumors and speculation have been misguided.