Short Sellers Savage Weakest Stocks

Short sellers aimed their guns at the stocks of the financially weakest companies, as data from the period that ended on September 14 shows. The actions hold true for shares that trade on both the Nasdaq and NYSE.

In the period, the short interest in Nokia Corp. (NYSE: NOK) soared 28% to 315 million, a level rarely reached by any companies. Clearly, the so-called smart money considers the handset firm to be in a position from which it can never recover, no matter how many new products it launches.

Shares sold short in Intel Corp. (NASDAQ: INTC) competitor Advanced Micro Devices Inc. (NYSE: AMD) rose 10% to 121 million. Investors believe that its tiny market share and the the "death of the PC" will kill its future prospects.

The short interest in troubled supermarket company Safeway Inc. (NYSE: SWY) was up 5% to 73 million. Its shares have plunged as it looks for a way to reverse losses and restructure to remain viable.

The short interest in Ford Motor Co. (NYSE: F) spiked 12% to 123 million. Investors worry that its European operations will continue to lose money, and that it has little presence in China and a slipping presence in the United States.

Shares short in Staples Inc. (NASDAQ: SPLS) moved higher by 6% to 73 million. Investors may find they have been burned. The company was crippled by a crowded market, which includes Office Depot Inc. (NYSE: ODP), Office Max Inc. (NYSE: OMX) and Wal-Mart Stores Inc. (NYSE: WMT). But Staples cut its store count in a move toward efficiency, and the market traded the stock higher as a result.

Among the largest increases in short interest, based on percentage change, was the rise in Yahoo! Inc. (NASDAQ: YHOO). Clearly many investors do not believe a new CEO can make up for years of management mistakes.

Among other widely traded shares:

The short interest in Sirius XM Radio Inc. (NASDAQ: SIRI) rose 6% to 299 million. Share short in Research In Motion Ltd. (NASDAQ: RIMM) oddly dropped 6% to 83 million. The firm did announce better-than-expected earnings yesterday. Shares short in Intel fell 2% to 173 million. The short interest in Microsoft Corp. (NASDAQ: MSFT) fell 3% to 86 million. Shares sold short in Facebook Inc. (NASDAQ: FB) rose 3% to 88 million.

Among stocks traded on the NYSE:

Shares short in Citigroup Inc. (NYSE: C) rose 3% to 66 million. The short interest in Bank of America Corp. (NYSE: BAC) fell 6% to 205 million. Shares sold short in Johnson & Johnson (NYSE: JNJ) fell 5% to 166 million. And the short interest in Sprint-Nextel Corp. (NYSE: S) rose 5% to 103 million.

Sources: Nasdaq and NYSE.

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Short Interest Tagged: AMD, BAC, C, F, FB, featured, INTC, JNJ, MSFT, NOK, ODP, OMX, RIMM, S, SIRI, SPLS, SWY, WMT, YHOO