Apple Inc. (AAPL): Short Interest Peaked In April

0
Apple Inc. (AAPL): Short Interest Peaked In April
ElisaRiva / Pixabay

Short interest in Apple Inc. (NASDAQ:AAPL) is on the move, rising rapidly in April and then declining almost as fast. CNN Fortune’s Philip Elmer-DeWitt reports that short interest in the stock peaked in the second half of April.

Play Quizzes 4

Apple Inc. (AAPL): Short Interest Peaked In April

Rapidly Rising Short Interest In Apple

In April of this year, we saw short interest in Apple swell to 20 million shares. In April of last year, short interest in the stock was just 8 million shares. And as if that year over year increase wasn’t enough, this year between April 15 and April 30, short interest in Apple Inc. (NASDAQ:AAPL) actually doubled, rising to 41.6 million shares, a new record. Right before that March quarter report, the stock fell below $400 per share to a price it hasn’t been at since 2011.

This Long/ Short Equity Firm Sees A Time-Arbitrage Opportunity In This Pest Control Merger

PestYost Partners was up 0.8% for the first quarter, while the Yost Focused Long Funds lost 5% net. The firm's benchmark, the MSCI World Index, declined by 5.2%. The funds' returns outperformed their benchmark due to their tilt toward value, high exposures to energy and financials and a bias toward quality. In his first-quarter letter Read More

Using the terminology of Canadian money manager Mal Spooner, Elmer-DeWitt said that shorts swarmed Apple right before its March quarter earnings were released. Essentially he said that Apple’s stock price was mugged by investors shorting the stock. When the company’s stock price hit its low of $385 per share two days before Apple’s March quarter earnings report, the value of the stock ex cash was lower than in the fall of 2000, according to Elmer-DeWitt.

Rapidly Declining Short Interest

He notes also that the so-called “muggers” have “backed off a bit.” In just two weeks, short interest in Apple Inc. (NASDAQ:AAPL) declined again, dropping 37.6 percent to 26 million shares. The decline is likely because the company was seen to turn a corner with its new capital allocation plan.

Led by hedge fund manager David Einhorn, investors had been clamoring for Apple Inc. (NASDAQ:AAPL) to return more capital to shareholders. When the company announced a plan that received Einhorn’s seal of approval, many investors came to believe that Apple Inc. (NASDAQ:AAPL) had stopped its stock’s free fall.

Today Apple Inc. (NASDAQ:AAPL) shares topped $450 briefly early in the trading day before falling again. As of this writing, they hadn’t gotten up enough steam to drive back over $450 per share again.

Updated on

Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
Previous article Research In Motion Ltd (BBRY) Q10 Carries High Hopes: NBF
Next article LinkedIn: Interdependent And Interconnected Features [INFOGRAPHIC]

No posts to display