Shorts Cut Interest in Old Tech Firms

Short sellers backed away from their gambles on old tech firms as they increased their positions in new Web 2.0 companies.

For the period that ended July 31, short sellers cut their position in Microsoft Corp. (NASDAQ: MSFT) 10% to 83 million. The short interest in Dell Inc. (NASDAQ: DELL) dropped 15% to 44 million. Shares short in Cisco Systems Inc. (NASDAQ: CSCO) declined 10% to 52 million. Shares short in Seagate Technology PLC (NASDAQ: STX) fell 15% to 28 million. The short interest in Texas Instruments Inc. (NASDAQ: TXN) dropped 20% to 16 million. Old tech companies, even those with only modest growth, appear to be a better gamble than the new generation of firms, at least as measured by short interest

Among the brand new public companies, the short interest in Groupon Inc. (NASDAQ: GRPN) was higher by 40% to 55 million — a bet that almost certainly paid off. The short interest in Facebook Inc. (NASDAQ: FB) rose 8% to 61 million — another likely winner. Only Zynga Inc. (NASDAQ: ZNGA) avoided the trend as its short interest fell 8% to 32 million.

Numbers for certain other widely held stocks: the short interest in Sirius XM Radio Inc. (NASDAQ: SIRI) rose 8% to 330 million, shares short in Bank of America (NYSE: BAC) were flat at 225 million, the short interest in Nokia Corp. (NYSE: NOK) rose 22% to 203 million, shares short in Johnson & Johnson (NYSE: JNJ) were down 10% to 201 million, and short interest in Sprint Nextel Corp. (NYSE: S) fell 11% to 157 million

Data from NYSE and Nasdaq.

Douglas A. McInyre