Short Interest in Apple Falls Over 7 Million Shares

By Douglas A. McIntyre Updated Jan 12, 10:40AM EST · Published Jun 27, 6:30AM EDT

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Short Interest in Apple Falls Over 7 Million Shares — © courtesy of Apple Inc.

Ahead of earnings, and the release of the iPhone 8, the short interest in Apple Inc. (NASDAQ: AAPL) fell 7.7 million shares to 55.5 million for the period that ended June 15. Apple’s shares are down over 5% in the past month to $146.

Skeptics of Apple’s future generally make one or more of three arguments. These include a tepid reaction to the iPhone 8, a general perception that the world’s largest tech companies are overvalued as a group and that Apple has gotten into businesses it may not be able to dominate.

The iPhone 8 presumably will launch in September, although there a rumors the date could be pushed toward the end of the year. A late release could trigger a sell-off in Apple shares. It would open the door to speculation that Apple has trouble in its supply chain, or that the early versions of the iPhone 8 have technical flaws that must be repaired before release. The iPhone 8 also is expected to be a major leap ahead from the iPhone 7 family. Any major disappointment about new features and functions could cripple sales over the crucial holiday sales season.

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Several of the largest tech stocks have sold off recently. These include Facebook Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOGL), Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT). Among all of them, Apple has dipped the most and posted the smallest recovery. Wall Street has become wary that, although each dominates its tech arena, shares have risen far too quickly and without adequate earnings support. In the past year, for example, Apple’s shares are up 59%.

Apple has entered several areas of tech that put it into competition with some of these larger tech companies. Its self-driving car initiative is well short of the work done by Alphabet’s Waymo. Its video on demand service lags well behind Amazon’s. Apple’s iPad tablet has had greater competition recently, particularly from Microsoft.

For short sellers who have built large Apple positions, only one thing of substance has to go wrong at the company. And the list of what could go wrong is substantial.

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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.