Who Will Fix This Apple Problem?
With a haystack of possible problems that may have contributed to Apple’s (NASDAQ:AAPL) recent bumpy ride, looking for one needle is almost silly. But among issues such as fiscal cliff-related problems and margin and profitability worries, there is also another cause for the cascading selloff. According to The Motley Fool, Apple shorts have gone up substantially over the past few months.
In just more than two months, bearish sentiment around Apple has grown up almost 59 percent, giving the share price weaker legs than ever. “Since the end of August, Apple’s short interest has increased dramatically from roughly 13.6 million shares held short to over 21.6 million shares held short at one point in November,” the report said. Noticeably, the first half of November saw a huge jump of 28 percent in short interest and was unfailingly accompanied by a 12 percent drop in Apple share price.
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However, as the report points out, there are limitations to explaining market activity with short interest. For instance, the recent hike in short interest represented only 2.3 percent of Apple’s 940.7 million outstanding shares. But with the other worries, Apple’s problems have certainly been compounded by this clear negative sentiment. The company’s upcoming earnings report in January may change some things around, though.
Apple closed $1.10 percent down at $509.41 on Friday and is now down 27.43 percent since reaching a record closing high in mid-September.
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