Nasdaq Short Interest Rose 3.7% To a Record in the Latest Month
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By DANIELLE SESSA, July 27, 1998
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Short interest rose 3.7% to a record in the latest month
on the Nasdaq Stock Market.
The total, which includes Nasdaq small-capitalization and
large-capitalization stocks, climbed to 2,169,973,009 shares on July 15
from 2,092,546,674 shares, the previous high, in mid-June, according to
Nasdaq.
On the Nasdaq SmallCap Market, which is
made up of the 1,288 smaller-cap stocks,
short interest increased 17%. It rose 3.4% for
the 4,111 larger-cap stocks on the Nasdaq
National Market.
Traders who sell "short" borrow shares and then sell them, betting they can
profit by buying the stock back later at lower prices.
Short interest is the number of shares that haven't been repurchased for
return to lenders. As such, it is often taken as an indicator of the degree of
negative sentiment among investors in the stocks. Investors may rely on
short selling for other purposes, including as a hedging strategy related to
corporate mergers and acquisitions, for convertible securities and options,
and for tax purposes.
The Nasdaq National Market's short-interest ratio fell to three days from
3.21 days in the previous month. The short-interest ratio for the smaller
stocks rose to 1.24 from 0.84. The ratio is the number of trading days that
would be required to close out the short positions through share purchases
and is considered a measure of trading sentiment.
The following companies had the largest decreases in short interest: CHS
Electronics Inc., down 7,862,688 shares to 3,421,177; Intel Corp., off
7,506,853 shares to 26,386,002; Dell Computer Corp., down 5,250,242
shares to 28,127,996; Sun Microsystems Inc., off 4,709,140 shares to
10,630,105, and E*Trade Group Inc., down 3,365,823 shares to
4,771,011.
The following companies had the largest increases in short interest:
WorldCom Inc., up 20,254,784 shares to 137,208,492; ADC
Telecommunications Inc., up 16,179,356 shares to 18,720,790; Tellabs
Inc., up 7,565,970 shares to 25,929,757; Microsoft Corp., up 5,983,798
shares to 35,571,116, and Tele-Communications Class A, up 5,457,859
shares to 26,361,082.
Among companies with the largest short-interest positions, Washington
Mutual Inc. was up 3,394,976 shares to 37,140,839; Boston Chicken
Inc. increased 1,468,608 shares to 21,249,355; Informix Corp. was up
219,137 shares to 19,039,821; Cisco Systems Inc. rose 1,208,861
shares to 18,951,309 and Oracle Corp. was down 2,756,952 shares to
17,069,260.
Nasdaq short-interest figures will next be published Aug. 26.
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