Apple Short Interest Plunges 14 Million Shares

By Douglas A. McIntyre Updated Jan 12, 10:12AM EST · Published Jul 13, 6:20AM EDT

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Apple Short Interest Plunges 14 Million Shares — © Thinkstock

Shares sold short in Apple Inc. (NASDAQ: AAPL) dropped 13.7 million in the period that ended June 30. The figure shrank to 41.9 million shares, so the drop off was 25%.

The reduction in short interest coincided with a period when Apple’s shares have traded flat to down. For the past 30 days, they are flat at $145. However, over a slightly longer term, Apple’s shares have dropped from their all-time high. Shares traded at over $156 in mid-May.

Skepticism in some quarters about Apple’s future has grown as the release of the iPhone 8 gets closer. There have been rumors that the phone will be released last because of hardware glitches. Several analysts have capped their price targets on Apple, while others have dropped their ratings. Others anxious about Apple’s future believe the change from the iPhone 7 to iPhone 8 features will not be enough to spur record sales.

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Apple also has been pegged as a one trick pony that has not diversified beyond its core businesses as Amazon, Google and Microsoft have done. The best example among these is Amazon.com Inc. (NASDAQ: AMZN), which is currently a leader in e-commerce, streaming media and cloud computing. Its buyout of Whole Foods will move it more deeply into the huge grocery retail market. By contrast, the iPhone dominates Apple’s revenue while new products like the Apple Watch have barely moved the sales needle. New data from Gartner shows that the Mac’s global market share has stalled.

Apple’s value also has been undermined by the perception that all big U.S.-based tech companies have share prices that have outpaced their earnings. If that is true, only modest bits of bad news could reverse huge run-ups in stock value over the past year.

Perhaps the reason short sellers have dropped their positions is that while Apple has risks associated with its business plan, it remains one of the two dominant companies in the massive and profitable smartphone market, the other being Samsung. If the iPhone 8 is a huge hit, Apple’s stock likely will retrace toward its all-time high, and perhaps higher. Being a short under those circumstances would be costly.

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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.