It would appear that Carl Icahn's attempt to take over Yahoo! (NASDAQ: YHOO) has a few less fans. Short sellers increased their interest in the company by 19.4 million shares to 66.6 million between May 15 and May 30.
The gamble is almost certainly based on the emerging sentiment that Icahn has made an awful decision. He will either lose his proxy fight to take control of the company, or win it and find that Microsoft (NASDAQ: MSFT) no longer wants to buy the company. Traders in general seem to like that theory. Yahoo! shares have moved from just shy of $27 five days ago to as low as $26.26 yesterday.
Icahn's biggest weakness may be that he has to be right. It has cost him a bundle in Motorola (NYSE: MOT) and Blockbuster (NYSE: BBI). Now, there is no indication that Microsoft will pay any premium at all for Yahoo!. Redmond may have no interest in any deal any more.
Some group of traders is guessing Yahoo! will trade much lower.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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