The overbought markets, along with political and geopolitical uncertainties and the rising concerns about a sizable market correction, prompted some short sellers into action again in the final two weeks of last month. Moves among the most shorted stocks traded on the New York Stock Exchange between the May 15 and May 31 settlement dates were mostly upward but also mostly modest.
One of the big three Detroit automakers stood out with a big upswing in the number of its shares short during the period. Bucking the trend though helped one of the world’s largest oilfield services companies slip from the top of the list and a long-suffering telecom to also slip down the list.
Note that the top six stocks on the list all had more than 115 million shares short at the end of the most recent settlement period.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in nearly every period so far this year, and now it is the most shorted NYSE stock again. Short interest increased most recently by around 3% to about 167.05 million shares. That was 18.7% of the company’s float. At the most current daily average, it would take about five days to cover all the short positions.
Merrill Lynch downgraded Chesapeake earlier in the month, but was it justified? The stock ended the two weeks more than 9% lower, though it was up more than 3% at one point. The S&P 500 saw a fractional gain in that time. The stock closed most recently at $4.97 a share, which is around 29% lower year to date. Shares have changed hands between $3.93 and $8.20 in the past 52 weeks.
Weatherford International
Weatherford International PLC (NYSE: WFT) slipped from the top of the list with about a 3% decline in the number of shares short in the latter two weeks of last month. That followed two double-digit percentage increases in a row. The nearly 157.61 million shares reported most recently was a retreat from the highest level of short interest in the past year, and it represented 16.2% of this oil and gas driller’s total float. The days to cover reading ended the period at around eight.
Weatherford stock has been in retreat since it posted a quarterly net loss at the end of April. Shares were down more than 8% in the two-week period, and they pulled back even further afterward. The share price was most recently at $4.46. That was up handily from the multiyear low of $3.73 from last November, but less than the 52-week high of $7.09 seen back in March.
AT&T
The more than 150.45 million AT&T Inc. (NYSE: T) shares short on the most recent settlement date was around 6% greater than in the middle of May. It also was 2.5% of the float, as well was the highest level of short interest in at least a year. As of the latest settlement date, it would take about eight days to cover all short positions.
Rival Verizon recently outbid AT&T for the 5G assets in Straight Path Communications. In the final two weeks of last month, short sellers watched the share price pull back about 3% and then recover to end about where it started. The stock closed most recently at $38.79 a share, which was less than 9% lower than at the beginning of the year. The 52-week trading range for the shares is $36.10 to $43.89.
24/7 Wall St.Ford
After taking a breather in the previous period, short sellers resumed piling on Ford Motor Co. (NYSE: F) again. The latest rise in short interest was a surge of more than 21%, bringing the reported number of shares short to more than 140.63 million. That represents 3.6% of the total float, and it was the fifth time this year that short interest was more than 100 million shares. It still would take three days to cover all short positions, as of the latest settlement date.
During the period, Ford ousted its chief executive and named the head of its autonomous car division to replace him. The share price seesawed during the period but ended less than 2% higher. It has continued to rise and fall since then. The shares have changed hands between $10.67 and $14.04 apiece in the past year. They were trading at $11.13 on Friday’s close, which is more than 8% lower than at the beginning of the year.
Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) saw the number of its shares short increase less than 2% from the previous period, but the latest reading was the greatest so far this year. And note that the more than 119.38 million shares reported totaled 4.8% of the Chinese e-commerce giant’s float. The daily average trading volume jumped during the period, and the days to cover slipped from more than 12 to more than nine.
Alibaba’s most recent earnings report seemed weak. The company’s share price seesawed in the two-week short interest period but ended the month fractionally higher. The stock hit a 52-week high of $148.29 on Friday but closed out the week at $139.44 a share. The 52-week low of $73.30 was seen almost a year ago.
Sprint
Late last month, Sprint Corp. (NYSE: S) saw one of the few short interest declines among the most shorted NYSE stocks. And note that the number of its shares short interest has decreased in 11 of the previous 14 periods. Most recently its shares short shrank by more than 6 million to more than 115.25 million, which was 18.1% of the telecom’s total float. The days to cover rose from about five to around seven during those two weeks as the daily average volume pulled back from a year-to-date high.
Sprint was still rumored to be in merger talks with T-Mobile last month, and its share price dropped about 14% afterward. It ended the latest short interest period up more than 7%, despite being down almost 7% at one point. The shares closed most recently at $8.12. They hit a 52-week high of $9.65 back in February, which compares to the 52-week low of $3.61 from almost a year ago.
And the Rest
Rounding out the top 10 were Bank of America Corp. (NYSE: BAC), J.C. Penney Co. Inc. (NYSE: JCP), CenturyLink Inc. (NYSE: CTL) and Vale S.A. (NYSE: VALE). Among these, short sellers favored J.C. Penney, pushing its short interest up by more than 16%. The Brazilian miner bucked the trend with a modest decrease in the number of its shares short.
Just outside the spotlight of the top 10 most shorted NYSE stocks were General Electric Co. (NYSE: GE) and Seadrill Ltd. (NYSE: SDRL). And note that Infosys Ltd. (NYSE: INFY), Pandora Media Inc. (NYSE: P) and Snap Inc. (NYSE: SNAP) saw large upswings in their short interest in late May, but not enough to lift them into the top 10.
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