Short interest falls as the reinvention of CBS takes hold

After the split of CBS (NYSE: CBS) from Viacom (NYSE: VIA), Wall St. wondered whether either company would do well. Both were in old-world media, and neither had a major internet presence the way that TimeWarner (NYSE: TWX) did with AOL and News Corp (NYSE: NWS) did with MySpace.

But, CBS's plans have caught investors' eyes. The stock is up 27% over the last year, compared to Viacom at 15%. And, CBS has created its own internet marketing program that has led Wall St. to believe that the company can capitalize on new media.

Recently, the media company bought online ticket sales firm TicketReserve. CBS also paid $280 million for radio streaming company Last.FM.

The CBS core businesses are also doing well. The network will finish the current TV season as the most watched network for the fifth year in a row. In the most recent quarter, the company's broadcast properties showed a modest increase in revenue compared to the same quarter a year ago.

Short interest in CBS dropped six million shares in June to 43 million. If the compay's internet plans go well and network rating stay high, there is little reason to think the stock will not keep rising.

Douglas A. McIntyre is a partner at 24/7 WallSt.