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July 27, 1999
Money & Investing
Short Interest in Nasdaq Issues
Increased 4.39% in Latest Month
By DANIELLE SESSA
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Short interest rose 4.39% in the latest month on the
Nasdaq Stock Market, partly as bearish investors placed bets against
stock prices that soared to records during the period.
The short-interest total, which includes Nasdaq small-capitalization and
large-capitalization stocks, increased to 1,987,498,609 shares on July 15
from 1,903,850,289 in mid-June, according to Nasdaq.
On the Nasdaq SmallCap Market, which is
made up of the 1,010 smaller-cap stocks,
short interest climbed 8.91%. It rose 4.28%
for the 3,792 larger-cap stocks on the
Nasdaq National Market.
Traders who sell securities "short" borrow shares and then sell them,
betting they can profit by buying the stock back later at a lower price.
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 eased to 2.17 days
from 2.18 days in the previous month. The short-interest ratio for the
smaller stocks rose to 1.09 days from 0.92 day. 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: Cisco
Systems Inc. fell 7,932,907 shares to 36,314,419. Oracle Corp. fell
5,623,971 shares to 14,750,461 shares; MedImmune Inc. fell 4,722,699
shares to 705,092; Qualcomm Inc. fell 3,618,831 shares to 15,078,549
shares; and MCI WorldCom Inc. fell 3,611,212 shares to 25,324,837
shares.
The following companies had the largest increase in short interest:
VoiceStream Wireless Corp. rose 6,024,157 shares to 6,304,422 shares;
Metromedia Fiber Network Inc. rose 5,824,761 shares to 14,775,356
shares; Ameritrade Holding Corp. Class A rose 5,533,888 shares to
11,991,655 shares; Nextel Communications Inc. Class A rose 5,176,745
shares to 21,799,465 and Iridium World Communications Inc. rose
4,343,748 shares to 11,243,334 shares.
Among companies with the largest short-interest positions: Intel Corp. was
up 3,043,443 shares to 42,941,014; Microsoft Corp. was up 1,417,787
shares to 32,216,047; Dell Computer Corp. was up 927,286 shares to
31,556,379; E*Trade Group Inc. was up 2,319,529 shares to
19,554,698; and PeopleSoft Inc. was up 935,769 shares to 17,366,384.
The next Nasdaq short-interest report will be published on Aug. 25.
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