Large Short Interest Change in Cult Stocks in August (ALU, ABK, BGP, BRCD, C, DRYS, PMI, BPOP, RAD, SIRI, S, VG)

Investing

Published: August 25, 2010 10:42 am

Last Updated: April 28, 2020 12:35 am

Many traders and investors love the active penny-stocks and low-priced stocks, and the short interest is often used as a measure for or against the shares of the active cult stocks. The short selling from August 13 versus July 30 settlement dates saw many big changes in some of these actively traded cult stocks. We have tracked and reviewed the changes in many of these and took a look at Alcatel-Lucent (NYSE: ALU), Ambac Financial Group, Inc. (NYSE: ABK), Borders Group, Inc. (NYSE: BGP), Brocade Communications Systems, Inc. (NASDAQ: BRCD), Citigroup, Inc. (NYSE: C), DryShips Inc. (NYSE: DRYS), PMI Group, Inc. (NYSE: PMI), Popular, Inc. (NASDAQ: BPOP), Rite Aid Corporation (NYSE: RAD), Sirius XM Radio Inc. (NASDAQ: SIRI), Sprint Nextel Corporation (NYSE: S), and Vonage Holdings Corp. (NYSE: VG). We have taken a look at the moves and the changes in short interest, and then added in on color on each where applicable.

Alcatel-Lucent (NYSE: ALU) is still a turnaround that won’t turn around, but it saw a drop in short interest as some bets may have also been there against currency issues. At August 13 settlement date the short interest was up 10.4% to 27.03 million from 24.49 million shares from July 30.

Ambac Financial Group, Inc. (NYSE: ABK) is still a “brand which could disappear” and it has been getting hit almost daily on fears of a bankruptcy. What is interesting is that it saw a small decline in short interest, implying that shorts are taking the money and running. The short interest is also down sharply from June when it saw 71,653,753 shares at June 15 short interest. The August 13 short interest was down 0.9% at 58.37 million shares versus 58.88 million shares at July 30.

Borders Group, Inc. (NYSE: BGP) saw a drop in short selling despite the confusion around earnings and around a possible sale. August 13 short interest was 4.49 million shares, down by -2.9% from the 4.63 million on July 30.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) saw a large drop in the short interest: 18.56 million on August 13, down by -17% from 22.35 million as of July 30.

Citigroup, Inc. (NYSE: C) was a large drop despite the selling we have seen in banks in recent days. The August 13 settlement date was 403 million shares in the short interest, down by -8.1% from the July 30 reading of 438.9 million shares short.

DryShips Inc. (NYSE: DRYS) is still the ultimate coin toss, but an active short seller candidate from time to time. The short interest was 21.933 million shares on August 13, down by -3.4% from the 22.709 million on July 30.

PMI Group, Inc. (NYSE: PMI) saw a decent gain in short interest, interesting considering all of the refinance activity: 22.66 million shares at August 13 versus 20.27 million at July 30.

Popular, Inc. (NASDAQ: BPOP) is still seeing a steady drop after that capital raise earlier in the year. At August 13 the short interest was 14.48 million, down by -5.3% from 15.3 million on July 30. This was 25,518,384 in the short interest as of May 28.

Rite Aid Corporation (NYSE: RAD), despite all its woes, saw a large drop in the short interest: 31.93 million on August 13 versus 36.03 million on July 30.

Sirius XM Radio Inc. (NASDAQ: SIRI) was a significant drop as the company keeps raising guidance. August 13 showed 184.76 million shares short, down a sharp -11.5% from 208.65 million on July 30.

Sprint Nextel Corporation (NYSE: S) is seeing a return to higher and higher short interest as the shares short on August 13 were 91.35 million shares short, up 6.7% from the 85.59 million on July 30. The largest we saw in any recent months was 100,520,184 shares short as of May 28.

Vonage Holdings Corp. (NYSE: VG) has been climbing in the short interest through time, although we are seeing a drop this month: 8.055 million on August 13, down 0.6% from 8.1 million on July 30.

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JON C. OGG

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