Seeking Alpha
Long only, contrarian, event-driven
Profile| Send Message|
( followers)  

The Nasdaq Composite index continued its march upwards for 2012 at levels not seen since early-November. The Nasdaq closed at 2,710.76 on January 11 on positive sentiment generated by the Consumer Electronics Show.

With the year-to-date return already at 2.3%, is the rise due to a short-squeeze? Looking closely at the most actively-traded companies with a rising short position:

#

Company

Dec. 15

Nov. 30

% Change

1

Micron Technology, Inc.

67,127,184

64,575,139

4

2

OCZ Technology Group Inc

21,482,558

20,609,711

4.2

3

Groupon, Inc.

14,796,819

7,637,404

93.7

4

Focus Media Holding Limited

12,098,371

9,820,982

23.2

5

Universal Display Corporation

10,945,043

9,870,590

10.9

6

OmniVision Technologies, Inc.

5,991,729

4,053,913

47.8

7

Maxim Integrated Products, Inc.

5,110,417

4,017,266

27.2

[1] Micron Technology, Inc. (NASDAQ:MU)

Micron was on the list for most actively traded stock on every trading session for 2012. The short position rose 4.0% to 67.13M shares between November 30 and December 15 2011. Closing recently at $7.22, short sellers lost $1.70 since mid-December, or around 23% as shares rose.

Optimism for Micron was sustained after the Semiconductor Industry Association reported that the semiconductor industry is "poised to close 2011 with growth and looks toward 2012 for further improvement."

[2] OCZ Technology Group Inc. (NASDAQ:OCZ)

OCZ saw its short position rise to 21.48M shares, up 4.2%. Shares were unable to trade above $8 after earnings were announced, and closed recently at $7.67. With 48.49M shares floating, OCZ's short float is high, at 44%. OCZ reported:

  • 94% increase in revenue to $103.1M
  • 237% SSD growth
  • Strong release for Drive R4 and the Revo 3 series
  • 400% increase in engineering headcount

The company also announced a new Kilimanjaro native PCIe controller platform that was jointly developed with Marvell (NASDAQ:MRVL). The Z-Drive R5 uses a PCIe 3 interface and is the world's fastest PCIe SSD.

[3] Groupon, Inc. (NASDAQ:GRPN)

After increasing 93.7% to 14.80M shares, Groupon is down $3 to $19.00 in 2012. This represents a gain of 14.3% for short sellers. Groupon announced a release of a new merchant centre that "makes it simple for businesses to track customer comments, customer acquisition, incremental customer spending and ROI from Groupon marketing services."

Groupon's share price will continue its struggle this year, as investors take a "show me" approach. Even a survey showing how small businesses liked to work with coupon sites like Groupon was not enough to stem the decline.

[4] Focus Media Holding Limited (NASDAQ:FMCN)

Focus Media shares are still down from November, after Muddy Waters accused the company of fraudulent practices. In December, short selling increased 23.2% to 12.10M shares. Shares continued its decline at the start of the year, but rose to above December lows when the company

To restore confidence to its shareholders, the Chinese digital-advertising firm said it would start paying a quarterly dividend equal to a quarter of the company's annual profit.

[5] Universal Display Corporation (PANL)

Trading at $35 when the short position increased by 10.9% to 10.95M shares, Universal display closed recently at $41.51. Short sellers saw gains dissipate as excitement for OLED in televisions were showcased at the Computer Electronics Show.

PANL is a company to buy at prices in the $30's. Until the company gives a clearer picture on revenue growth from Samsung, shares risk getting sold-off.

[6] OmniVision Technologies, Inc. (NASDAQ:OVTI)

Omnivision Technologies saw the short position for its shares increase to 5.99M, up 47.8%. Shares closed at $13.19, up over 30% since its profit warning issued on November 30. With tax-loss selling pressure absent, Omnivision is seen as a value play that will keep getting snapped up by bargain hunters.

[7] Maxim Integrated Products, Inc. (NASDAQ:MXIM)

Shares in Maxim Integrated saw an increased short position of 27.2% to 5.11M shares. The stock closed recently at $26.25, trading at a P/E of 15.72. The semiconductor sector is still in its corrective phase, but Maxim's shares are holding up. The company was unclear with when the correction would end. The CEO said that "Short lead times from manufacturing customers are making it tough to predict end demand for microchips and hard to say whether an inventory correction is bottoming out.

Source: 7 Shorted Technology Stocks Ripe For An Even Bigger Move