Short Sellers Make Big Push Into Telecom, Tech

Short sellers elbowed their way into telecom stocks in the period that ended December 15. The move is probably due to several reasons. Landline subscriber counts continue to drop as more home telephone users turn to VoIP and cellular alternatives. Cellular business margins may be hurt by competition for subscribers. The number of people who have wireless service in the US has peaked. The four large cellular firms must now press for larger pieces of the market. Add to that new competition over which company among them will get early control of the 4G market.

The short interest in AT&T (NYSE: T) rose 15% to 48.8 million. Shares short in Verizon (NYSE: VZ) were up 15% to 49.3 million. The short interest in crippled handset maker Nokia (NYSE: NOK), still the dominant company in the industry worldwide, rose 7% to 71.2 million. Shares short in troubled 4G supplier Clearwire (NASDAQ: CLWR) rose 30% to 31.3 million.

The short interest in most large tech stocks moved higher. Shares short in Microsoft (NASDAQ: MSFT) rose 12% to 84.5 million. The short interest in Dell (NASDAQ: DELL) was up 15% to 56 million shares. Shares sold short in Oracle (NASDAQ: ORCL) rose 13% to 32.9 million. The short interest in Nvidia (NASDAQ: NVDA) was up 17% to 32.7 million.

Among the companies with the largest short interests, the position in Sirius XM Radio (NYSE: SIRI) was flat at 225.7 million. Shares short in Level 3 (NASDAQ: LVLT) were down 10% to 147.4 million. Level 3 has been in a battle with some telecom and cable companies over rates charged for broadband transmission. The short interest in Citigroup (NYSE: C) rose 22% to 367.1 million. Citi’s shares are still in the midst of a recovery. Shares sold short in Ford (NYSE: F) fell 25% to 201.5 million. Ford is viewed as the most successful of the US car companies.

Data from NYSE and NASDAQ

Douglas A. McIntyre