It takes a certain kind of courage to short sell blue chips, such as the Dow Jones industrial average components. Short sellers are betting on these companies to fail, or at least for their share prices to fall handily. Plus, those sellers are responsible for paying the dividends on the stocks they short.

Maybe it is little surprise that only two of the 30 Dow stocks had sizable short interest between June 15 and June 30; that is, more than 50 million shares short. Almost a third of the index’s components had short interest of more than 25 million shares.

While the stock market had recovered much of its panic-selling losses from March, ongoing social unrest and a new rise in the numbers of COVID-19 cases as state economies “reopened” had many Americans worried. Investors trying to figure out what to do next may wonder then what the short sellers expected from some of the biggest, most well-respected names on Wall Street. Did they believe the lows would be retested during the summer doldrums?

As of the end of the month settlement date, the most recently reported period, short sellers still favored Exxon Mobil Corp. (NYSE: XOM), Pfizer Inc. (NYSE: PFE) and Microsoft Corp. (NASDAQ: MSFT) above all other Dow stocks.

Exxon

> Shares short: around 53.07 million
> Change from prior period: −10.2%
> Percentage of float: 1.3

Despite short sellers taking another breather in the most recent period, the oil supermajor remained the most shorted Dow stock late last month. Not that long ago, Exxon had hovered around the number five spot on the list for a time before floating up to the surface. At the average daily volume on the latest settlement date, the days to cover figure was about two.

Many believed Exxon’s generous dividend could be on the chopping block. Short sellers watched the share price pull back almost 12% but then recover a bit and end the period down about 8%. Note that the Dow ended the latter two weeks of last month around 1% higher.

After retreating 3% or so in the past week, Exxon Mobil stock closed trading most recently at $42.65 a share. That was in a 52-week range of $77.74 (about a year ago) to $30.11 (in March). The most recent share price is more than 30% higher since the year-to-date low in March, compared to almost a 37% gain in the S&P 500.

Pfizer

> Shares short: around 51.49 million
> Change from prior period: −4.2%
> Percentage of float: 0.9

This modest pullback in Pfizer shares short still left the pharmaceutical leader clinging to the number two spot on the list. It also was still below the year-to-date high of around 61 million shares short seen back in January. At the average daily trading volume on the latest settlement date, it would take investors less than two days to cover their short interest.

This maker of Lipitor, Viagra and Xanax is seen as being among the COVID-19 stocks with the most potential. Its shares retreated about 2% in the latter half of last month, though it had been more than 5% lower at one point. The S&P 500 rose less than 2% during the short interest period.

Pfizer stock closed most recently at $33.83 per share, which is about 2% lower than a week ago. The 52-week low of $27.88 was reached in March, and the 52-week high of $43.23 occurred last July. The shares now trade more than 13% lower than they did at the beginning of the year but are up more than 16% from the March low.

> Shares short: more than 43.13 million
> Change from prior period: 0.5%
> Percentage of float: 0.6

Microsoft remained at the third spot on the list in the latter half of June as it saw little change in the number of its shares short. It remains above the 52-week low of around 37 million shares short that occurred back in February. It would take these investors more than a day to cover their short bets, as of the close of last month.

During the period, Microsoft was seen as a top pick in the environmental, social, and governance (ESG) theme. The shares ended the two weeks trading more than 7% higher, and it continued to rise after the end of the period. The Nasdaq saw a gain of less than 4% during the short interest period.

Microsoft stock was last seen trading at $213.67 a share, after hitting a multiyear high of $216.38 last week. The 52-week low of $130.78 happened last summer. The latest share price is 34% or so higher than the low during the pandemic sell-off, about the same as the Nasdaq in that time.

And the Rest

Rounding out the top five most shorted Dow stocks on the most recent settlement date were Cisco Systems Inc. (NASDAQ: CSCO) and Visa Inc. (NYSE: V). Both the networking company and the financial services provider saw the numbers of their shares short increase marginally late last month. The former was praised for its solid dividend, while the latter saw price target hikes from both Oppenheimer and Citigroup during the period.

On the following list of short interest changes in the Dow stocks as of June 30, note that International Business Machines Corp. (NYSE: IBM) and Nike Inc. (NYSE: NKE) bucked the overall trend of short seller caution. The former moved to acquire a cybersecurity provider while the latter posted disappointing quarterly results last month.

Dow Stock	Short (millions)	Change	% Float
Exxon	53.07	−10.18%	1.26%
Pfizer	51.49	−4.20%	0.93%
Microsoft	43.13	0.47%	0.57%
Cisco	38.99	13.36%	0.93%
Visa	35.54	8.05%	2.11%
Apple	33.96	−2.48%	0.78%
Verizon	33.62	6.26%	0.81%
Intel	33.60	−13.53%	0.79%
Disney	25.64	−10.46%	1.43%
IBM	24.24	11.49%	2.74%
Coca-Cola	24.22	0.64%	0.57%
JPMorgan	20.04	−14.74%	0.66%
Walgreens	18.24	−0.25%	2.53%
Dow	16.52	−1.97%	2.23%
Merck	14.88	2.19%	0.59%
Procter & Gamble	14.88	−10.46%	0.60%
Walmart	13.05	−7.04%	0.94%
Raytheon Technologies	13.63	−16.09%	1.58%
Chevron	12.50	−23.80%	0.67%
Johnson & Johnson	12.78	−7.12%	0.49%
Boeing	12.10	0.41%	2.17%
Nike	11.46	12.26%	0.95%
American Express	10.18	−7.32%	1.27%
Home Depot	7.39	−16.49%	0.69%
Caterpillar	7.26	−18.14%	1.34%
3M	6.47	6.22%	1.13%
McDonald’s	6.00	−6.09%	0.81%
UnitedHealth	5.56	−9.27%	0.59%
Travelers	5.31	2.12%	2.11%
Goldman Sachs	4.24	−14.68%	1.29%

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