BlackBerry Ltd Sees Declining Short Interest

BlackBerry’s stock price appears to have stabilized, and as a result, short interest in the struggling Canadian smartphone maker seems to be declining. The decline came all of a sudden, according to data from SunGard Financial’s Astec Analytics.

BlackBerry short-sellers start to cover

According to Benzinga’s Kevin Riley, analyst Karl Loomes said short-selling activities increased dramatically during the first three weeks of this month. He said just between Jan. 1 and last week Thursday, borrowing of BlackBerry shares surged, climbing by as much as 20%.

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Short-sellers seem to be starting to worry, however. Loomes said his data suggests many of them have begun to move to cover their positions as BlackBerry’s stock price started to stabilize. He said the stabilization means short-sellers don’t expect to make much money betting that BlackBerry’s share price is going to decline again.

Why are short-sellers worried?

Shares of BlackBerry rose as much as 2% during regular trading hours at the NASDAQ today. The stock skyrocketed briefly last week before plunging back down to current levels after it was reported that Samsung may be pursuing BlackBerry as a potential acquisition target.

Although the companies denied that they were talking multiple times, this week a report indicated that Samsung may still be trying to seal a buyout deal with the struggling Canadian company. Last Thursday, BlackBerry stock rose as much as 8% as talk about the rumored buyout continued to swirl.

At this point it’s unclear just why short-sellers are starting to worry about their bets against BlackBerry. The stabilization in the company’s stock price could be the main reason, although the acquisition rumors could have also worried some.

Nonetheless, for right now anyway, it doesn’t look like Samsung really will buy BlackBerry. Indeed it would seem like a strange but desperate move for the Korean electronics giant. Samsung has been struggling to keep smartphone sales up and is joining the trend in the industry of targeting enterprise buyers. The partnership with BlackBerry is good for both companies as they try to target the enterprise space, but buying BlackBerry probably wouldn’t make sense for Samsung, at least not until there’s proof that BlackBerry CEO John Chen’s turnaround plan is working.