Apple Short Interest Flat Ahead of Earnings

By Douglas A. McIntyre Published Apr 27, 6:41AM EDT

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Short sellers have taken a neutral position head of Apple Inc.’s (NASDAQ: AAPL) earnings. The number of shares sold short in Apple remained flat at 64.8 million. The guessing game about iPhone sales may be enough to keep potential shorts on the sidelines.

The basis for the success of Apple’s quarterly earnings report will be iPhone sales, which are expected to come in around 55 million. However, some analysts have offered forecasts above 60 million.

The short sales figure is as of April 15.

24/7 Wall St. recently made the case for the huge role iPhone sales numbers will play in driving shares up or down immediately after earnings are announced:

Investors have focused on the Watch as Apple’s next critical product. Sales of the Watch might hit five million in the first month, if Apple has created a product that is as good as many early press reports say. Since Tim Cook became CEO, Apple has depended almost exclusively on the iPhone for surging sales. Nothing shows that more than the quarter that ended on December 27. iPhone unit sales hit 74.4 million, which drove $51.2 billion of Apple’s quarterly total of $74.6 billion for the period. The ratio has to remain, or improve.

For Apple, the stakes for strong iPhone sales remains high. Shares have risen 18% this year, and continue to be a primary engine of the Nasdaq’s rise to its record level. Apple’s shares have traded close to a peak as well, around $130 recently, which has increased its market cap to $760 billion.

Fortune reported that Apple’s success will have to be affected by strong sales from its huge China partner, China Mobile Ltd. (NYSE: CHL), which is the world’s largest wireless carrier, and Brazil sales. No one outside Apple has any real knowledge about these factors.

The last time the market become anxious about Apple’s performance, shares tumbled from $100 in September 2012 to $55 in March 2013. Tim Cook has gained enough admiration among investors that has given him much support from both the tech and investment communities. He could get a pass should the quarter be a bit weak. He will not get one if the results come in well below expectations. Sixty million iPhone sales leaves him in a safe position, at least until the next quarter.

For the time being, short interest in Apple is fairly small compared to its overall float, even if that short interest ranks it 14th among all Nasdaq public companies.

ALSO READ: The 5 Most Shorted Nasdaq Stocks

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.