The short interest in Motorola (MOT) rose from 22.8 million shares in March to 125.8 million in April. Motorola’s earning, announced this last week, were pathetic, so the increase is not surprise.
Rival handset companies Nokia (NOK) and Sony Ericsson reported substantially stronger results. So, the market is concerned that Motorola’s share of the global handset market is falling. That is made ever worse by two other factors. The first is that the average price for virtually all handsets is dropping as sales in poorer, developing countries begins to rise sharply. In addition. sales of handsets worldwide may rise by less than 10% year-over-year for the first time in memory.
Motorola’s handset sales problems and dual headwinds would seem to make it unlikely that the stock will move up any time soon.
Douglas A. McIntyre
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