The isolated stock effect of a reduction in arbitrage between LCI and QWST would be seen by LCI moving up, not by Qwest dropping.
The drop could be related to the below perhaps? WSJ Interactive reports today that QWST had the largest increase in short interest in the last month. Maybe that scared some people. (Below, second to last paragraph).
Phil
Short Interest on Nasdaq
Sets a Record, Rose 5.7%
By DANIELLE SESSA
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Short interest rose 5.7% to a record on the Nasdaq
Stock Market in the latest month.
The total, which includes Nasdaq small-capitalization and
large-capitalization stocks, rose to 1,923,330,179 shares on March 13
from 1,820,425,083 shares in mid-February, according to Nasdaq.
On the Nasdaq Small-Cap Market, which is
made up of the 1,381 smaller-cap stocks,
short interest climbed 11.3%. It rose 5.5% for
the 4,146 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 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 was 2.69 days
compared with 2.63 days in the previous month. The short-interest ratio
for the smaller stocks fell to 0.78 from 0.82. 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: Intel
Corp., down 16,966,268 shares to 29,078,538 shares; Dell Computer
Corp., down 13,500,057 shares to 28,857,151 and Microsoft Corp.,
down 8,047,437 shares to 34,641,781.
These companies had the largest increases in short interest: WorldCom
Inc., up 11,470,819 to 82,611,353; Comcast Corp. Class A special, up
5,241,991 to 7,200,524, and Qwest Communications International Inc.,
up 3,555,816 to 5,585,428.
Among companies with the largest short-interest positions: Nextel
Communications Class A was down 91,589 to 22,310,500; Sun
Microsystems Inc. was up 3,185,490 to 18,668,904; Boston Chicken was
down 717,318 to 16,590,431; and Apple Computer Inc. was up
2,978,074 to 15,008,862. |
