Apple Inc (AAPL) short sellers have been active ahead of the today’s earnings announcement. AAPL short interest is $10.86 billion, 92.8 million shares shorted, 0.54% of its float and a 40 bps stock borrow cost (general collateral). AAPL is now the third largest short in the U.S. market behind Tesla Inc (TSLA) and Alibaba Group ADR (BABA).
AAPL is the largest short in the domestic Information Technology sector:
Over the last month we have seen 12.5 million net shares shorted in the stock, worth $1.46 billion, a +15.5% increase in shares shorted even as its stock price rose +4.4%. Over the last week AAPL short selling has slowed down a bit, but there were still 2.0 million shares of net short selling, worth $238 million, as its stock price rose +3.5%.
Shorting AAPL shares has not been a good bet for short sellers in 2020 as they are down -$5.91 billion in net-of-financing mark-to-market losses for the year. Shorts are down -$786 million so far in October, which includes -$679 million on today’s +6.25% mid-day price move.
We are seeing continued short selling today as we wait AAPL’s earnings results after the close. If AAPL stock rallies on good news we should expect a wave of short covering and shares shorted trend back down towards the 76 million share level, we saw in early September. This concentrated short covering coupled with long buying should drive AAPL’s stock price higher and back towards the $137 year-to-date high we saw on September 1st.
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