Short Sellers Abandon Financial Shares, Tech Stocks

Short sellers are not longer willing to gamble on a collapse in the share prices of America’s largest financial firms. Perhaps they think that the issue of nationalization has largely disappeared, the bank earnings may get better, or that the government’s program to strip them of toxic assets may work.

Based on short selling data as of April 15, the short interest in Wells Fargo (WFC) dropped 11% to 149.8 million shares.

Shares short in AIG (AIG) fell 3% to 272 million. Shares sold short in US Bancorp (USB) dropped 12% to 66.8 million. The short position in Morgan Stanley (MS) fell 15% to 52 million shares. Shares short in Capital One (COF) dropped 20% to 27.7 million. And, shares short in JPMorgan (JPM) fell 7% to 65.4 million.

Most tech company stocks  had drops in shares sold short. The major exceptions were shares short in AMD (AMD) rose 14% to 69.4 million. The short interest in Taiwan Semiconductor (TSM) increased 21% to 40.5 million.

But, perhaps anticipating the tech earnings would be viewed as relatively good, shorts cut their position in Microsoft (MSFT) by 10% to 88.7 million and in Intel (INTC) by 16% to 80.5 million. Shares sold short in Applied Materials (AMAT) dropped 13% to 47.8 million. The short interest in Palm (PALM) PALM fell 9% to 39.9 million. Shares short in Yahoo! (YHOO) were down 8% to 37.5 million. Shares short in Nvidia (NVDA) were off 10% to 34.6%.

Perhaps the most notable change in short interest in among all large companies was the 52% drop in shares short in Ford (F) moving its total to 113.4 million.

Data from NYSE and NASDAQ

Douglas A. McIntyre