Short Interest in Big Tech Companies Falls

By Douglas A. McIntyre Published Jan 28, 6:28AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Short interest data from mid-January showed that short sellers moved out of big tech stocks, a sign that the market has warmed to a sector about which it has been ambivalent.

Shares sold short in Intel Corp. (NASDAQ: INTC) dropped 1.6 million to 213.4 million. It would take six days of trading in Intel shares to cover that amount. Intel’s recent earnings were short of spectacular, but showed the firm had not been as badly battered by falling PC sales as expected.

Shares sold short in Microsoft Corp. (NASDAQ: MSFT) fell by 3.2 million to 69.6 million. Days of trading needed to cover this are only two. Microsoft posted much better than expected earnings, and its share price rallied recently. Perhaps short sellers anticipated improvement in Microsoft’s hardware initiatives.

Short interest in eBay Inc. (NASDAQ: EBAY) fell 2.9 million, which would take one day to cover. The retreat was just ahead of Carl Icahn’s push to break off PayPal from its parent, a move that the activist investor believes will make Wall Street take more notice of the payment system’s growth and margins. Total shares sold short in eBay were 17.4 million.

Ahead of earnings that Wall Street worries will be flat, Yahoo! Inc.’s (NASDAQ: YHOO) short interest dropped sharply, down 2.5 million to 30 million, at only two days to cover. While Yahoo!’s stock price has soared, many investors believe this is primarily because of its holdings in Asia, particularly in Alibaba. However, even a modest improvement in Yahoo!’s display advertising would lead many skeptics to believe it has started to solve problems in its core business.

Running against the tide of improvement were several Web 2.0 companies. First among these was Facebook Inc. (NASDAQ: FB), which has become one of the most widely traded stocks on either the Nasdaq or NYSE. Shares in Facebook have sold off recently due to concern that its user base improvement has started to slow. Shares short in Facebook rose 2.3 million to 44 million. The short interest in Zynga Inc. (NASDAQ: ZNGA) rose 3.2 million to 37.4 million.

Finally, shares sold short in the most shorted stock on the Nasdaq plunged. The short interest in Sirius XM Holdings Inc. (NASDAQ: SIRI) dropped 48.1 million to 221.6 million. Its largest shareholder, Liberty Media, is trying to take over the balance of Sirius’s stock.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.