The stock market’s a funny place, eh? Just a couple of months after becoming the first company in history to break the $800 billion valuation mark, Apple now finds itself in the unusual position of having investors betting against it.
Short interest on Apple (meaning that investors are staking money on AAPL share prices falling) climbed by $1.3 billion over the past month. According to data compiled by S3 Partners, Apple is now the third most shorted company in the world — after Tesla and Alibaba.
The past two days get singled out as being particularly good ones for people rooting on Apple’s failure, as stock prices fell 6.2 percent.
The two big causes of the current decline are a recent report suggesting that the iPhone 8 may not be as fast as some of its rivals, and the downgrading of Apple stock by Mizuho analyst Abhey Lamba, citing limited upside.
“Tech short sellers look to be targeting Apple as the near-term underperformer in the sector,” Ihor Dusaniwsky, the head of research at S3, wrote in a client note. “It will be interesting to see if this is a longer-term trade with short interest remaining at or above the $9 billion level or if we will see an avalanche of buy to covers to realize short-term profits if Apple’s stock price rebounds after this short-term price slump.”
At time of writing, Apple shares are trading at $146.59.
Source: Business Insider
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
2 responses to “Pessimistic traders bet big against Apple”
Isn’t iPhone 7 already faster than all of the rivals? This what’s happened when some 55+ is trying to understand modern tech.