Apple Short Interest Dives Following Share Price Drop

Technology

Published: November 25, 2015 7:51 am

Last Updated: January 13, 2020 4:47 pm

Short interest in Apple Inc. (NASDAQ: AAPL) fell 5% in the two-week reporting period ended November 13. Some 70.93 million Apple shares were short, about 1.3% of the company’s float. Days to cover is two at average daily volume of about 52 million shares traded.

Apple is the eighth most shorted stock on the Nasdaq and in the two weeks leading up to November 13, the shares dropped about 6.8%.

Year to date Apple’s stock is up about 7.7%, a nice recovery since mid-August when the shares were down about 6.5%. Over the past 12 months shares are up just 2%.

The company’s stock price took a hit on November 10 following a report from Credit Suisse that component orders for the various iPhone 6 and 6S products had fallen by as much as 10%. The analysts lowered their estimates for iPhone 6 from 242 units manufactured to 222 million units for calendar year 2016 and also said they expected 235 million new units in 2017. Earnings per share in 2016 were cut from $10.40 to $9.81.

But that was then, and this is now. The beginning of the holiday season has generated a lot of estimates of how many phones, watches, tablets, and computers Apple will sell. Special pricing at a variety of stores should help move product and Apple gets paid the same whether the Apple Watch sells for full price or at a discount. For example, Best Buy discounted Watches on Tuesday and Walmart is selling a 16GB iPad Wifi-only mini 2 at a discount of $68 off the regular price.

Consumers want to buy Apple products, but they also want to buy them at less than full price. A report at Yahoo! Finance noted that IBM set its Watson data analytics tool to the question of what consumers want this Christmas. The winner? Apple Watch.

Watson estimated iPhone sales will rise 3% year-over-year for the holiday quarter to 76.5 million units and Watch sales will rise to 6 million units. Whether IBM’s software is better at predicting Apple sales than analysts checking the supply chain remains to be seen.

Apple’s shares closed up about 1% on Tuesday at $118.88 in a 52-week range of $92.00 to $134.54. Shares are trading about flat Wednesday morning.

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