When the short interest in companies that are as robust as Apple (NASDAQ: AAPL) increases, it is a sign that investors are willing to bet against almost any firm in this market. For the period ending October 31, shares hold short in the big consumer electronics firm were up 16% to 28.1 million shares. The figure compares with short holdings as of the middle of October.
There is little obvious reason to think Apple will go lower. Its shares are below $94 already, down from almost $203 a year ago. By almost any measure, Apple is one of the most successful companies in the world, with a clean balance sheet, $33 billion in cash, growing sales, and the best products in its market segments.
The theory behind shorting Apple is that its holiday quarter will be weak. But that may be a fool's gamble. Most evidence points to Mac sales continuing to grow sharply even with most PC sales falling. The iPhone is taking market share from all other smartphones. The overall handset category may be down for the rest of the year, but Apple's product is almost certain to pick up sales.
By moving into Apple, a lot of short sellers will get burned.
Douglas A. McIntyre is an editor at 247wallst.com
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Reader Comments (Page 1 of 1)
11-12-2008 @ 11:23AM
Beltway Greg said...
Be still my heart. Has Douglas A. McIntyre called a bottom in Apple. Could one construe this post to be even remotely positive?
11-12-2008 @ 2:57PM
GeorgeS said...
Now I disagree with Doug even when he's positive. Apple has lost it's momentum. I now think it will simply go with the market, which I expect to go down.
Now the media wouldn't tell us such a thing as Obama hurting the economy now would they. (eg environmental BS, energy)
11-12-2008 @ 5:39PM
michael clark said...
The short selling is simple-the president has terminal cancer