After the strong start to the year, the momentum in the big U.S. stock indexes began to slow late in February. Trade concerns and fears of inflation another recession lingered, Federal Reserve Chair Jerome Powell testified before Congress, the earnings reporting season wound down, and even Warren Buffett himself had a bad day just ahead of the release of his highly anticipated annual letter.
Judging by the most shorted stocks traded on the Nasdaq between the February 15 and February 28 settlement dates, those sellers were focused on a couple of their favorites. Caesars Entertainment saw the only decline among the top 10, but it was a notable downswing. The real standout, though, was Apple, which faced short interest that more than doubled during the period.
Note that still just three Nasdaq stocks had more than 100 million shares short as of the most recent settlement date.
Sirius XM
> Shares short: More than 179.93 million
> Change from prior period: +3.0%
> Percentage of float: 11.5
After the huge decline in the number of Sirius XM Holdings Inc. (NASDAQ: SIRI) shares short in the prior period to the lowest level in the past year, the previous trend continued in the latter half of February. In fact, in seven of the past nine periods, the short interest has grown. It would take short sellers more than seven days to cover their positions.
Sirius launched more than 100 new music channels on its streaming platform last month. Though the stock ended the latter two weeks of February about 1% lower, it had been both up about 2% and down more than 2% in the interval. The Nasdaq increased less than 2% between the settlement dates.
Sirius stock closed at $5.97 a share on Monday, which is only marginally higher than at the beginning of the year. The 52-week low of $5.48 was seen just before and again after Christmas, while the multiyear high of $7.70 was reached last summer.
Caesars Entertainment
> Shares short: Nearly 120.85 million
> Change from prior period: −16.4%
> Percentage of float: 22.1
Despite ending three consecutive periods of rising short interest in Caesars Entertainment Corp. (NASDAQ: CZR), the stock stayed at second on the list. The prior reading was the greatest number of shares short in at least a year, and there have been more than 100 million shares short in 11 of the past 13 periods. At the latest average daily volume, the days-to-cover figure remained more than four.
During the period, activist investor Carl Icahn was said to be building a stake in Caesars. Its share price ended the final two weeks of last month more than 7% lower, even though they had been up more than 4% early in the period. Immediately afterward, the shares climbed a little more.
The stock ended Monday’s session at $8.66 per share, after retreating more than 1% in the past week. Caesars has a 52-week trading range of $5.84 to $13.54. Note that the low was seen during the Christmas Eve market sell-off.
AMD
> Shares short: More than 118.84 million
> Change from prior period: +2.5%
> Percentage of float: 12.9
Advanced Micro Devices Inc. (NASDAQ: AMD) remains at number three on this list after adding 2.8 million shares short in the period, reclaiming much of the decline in the previous period. The average daily volume plunged to a year-to-date low, and the number of days it would take to cover all short positions ticked up to more than two.
At least one analyst sees AMD and some of its peers as heading in the right direction after bottoming recently. Short sellers watched the share price climb about 7% but then give up the gain and end those two weeks down around 1%. The shares continued to pull back after the short interest period was over.
The stock closed trading most recently at $22.96 a share. That is more than 24% higher than at the beginning of the year, as well as down from last September’s 52-week high of $34.14. Shares have changed hands at as low as $9.04 apiece in the past year.
Apple
> Shares short: More than 96.83 million
> Change from prior period: +142.7%
> Percentage of float: 2.1
Apple Inc. (NASDAQ: AAPL) leaped back into the top six most shorted Nasdaq stocks in the latter weeks of last month, with shares short more than doubling from the previous period. Yet, the average daily trading volume fell to a year-to-date low, and the number of days it would take for investors to cover all their short positions grew from less than two to more than four.
During the short interest period, it looked increasingly like the iPhone maker’s problems might be worse than expected. Short sellers watched the share price rise almost 3% but give up about half that gain by the most recent settlement date. Again, the Nasdaq saw a gain of less than 2% during those two weeks.
After climbing about 2% last week, Apple stock ended trading most recently at $178.90 a share. That was in a 52-week range of $142.00 (at the beginning of this year) to $233.47 (last October). The share price currently is more than 13% higher than at the beginning of this year.
Novavax
> Shares short: More than 79.18 million
> Change from prior period: +9.2%
> Percentage of float: 20.9
Novavax Inc. (NASDAQ: NVAX) got knocked down a peg due to the rise of Apple, despite the notable increase in its short interest. The most recent figure did represent the greatest number of shares short in the past year. The average daily trading volume surged during the period, and the days to cover figure decreased from almost 10 to around four.
This Maryland-based vaccine maker posted disappointing late-stage trial results late in February. The share price tumbled more than 65% on the last day of the short interest period, though it had spent almost no time in positive territory during those two weeks.
Now trading in penny stock territory, Novavax ended trading most recently at about $0.51 a share. That falls within a trading range of $0.49 to $2.58 in the past 52 weeks. The share price currently is more than 72% lower than at the beginning of this year.
Opko Health
> Shares short: More than 73.80 million
> Change from prior period: +13.7%
> Percentage of float: 20.4
The number of Opko Health Inc.’s (NASDAQ: OPK) shares sold short reached a year-to-date high by the settlement date. But the average daily volume shrank somewhat in that two-week period, so it would take about 12 days for investors to cover all their short positions as of the end of the month.
Opko reported mixed fourth-quarter and full-year results late last month. The stock ended the short interest period with a decline of around 11%, most of the retreat following the earnings report. The share price did recover somewhat afterward, before losing momentum.
Shares closed most recently at $2.57 a share, after pulling back about 4% in the past week and down more than 14% so far this year. The stock has traded hands at between $2.34 (seen back in December) and $6.40 (last summer) per share in the past 52 weeks.
And Others
Rounding out the top 10 were TherapeuticsMD Inc. (NASDAQ: TXMD), Mattel Inc. (NASDAQ: MAT), Comcast Corp. (NASDAQ: CMCSA) and JD.com Inc. (NASDAQ: JD). All four saw gains in the numbers of their shares short, led by the double-digit percentage rise at JD.com.
Lingering outside the spotlight of the top 10 most shorted Nasdaq stocks this time were Frontier Communications Corp. (NASDAQ: FTR) and Intel Corp. (NASDAQ: INTC). Note that short sellers got out of the way on Micron Technology Inc. (NASDAQ: MU) and Zynga Inc. (NASDAQ: ZNGA) allowing them to drop further from the top 10.
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