NASDAQ and NYSE Short Interest data through November 15th was released recently. Short interest data is fascinating because it gives two opposite signals. On the one hand, short positions need to be covered, so high short interest represents pent-up buying power that can propel a stock higher. (Similarly: high short interest is an indicator of negative sentiment, which many take as a contrarian positive indicator.) On the other hand, most shorting is done by hedge funds, so high short interest ratios may suggest that the smart money is betting against a stock. With that preamble, here's a summary of the data and comments by Citigroup Internet Analyst Mark Mahaney:
- The median M/M change in Short Interest in November for the stocks we cover was up 4.7% (vs. 3% decline in October). The biggest M/M changes were: WBMD (down 36%), MNST (up 27%), GOOG (up 24%), and EBAY (up 19%).
- FTD, ADBL, EXPE, and CNET have by far the highest Short Interest Ratios among the stocks we cover, indicating relatively high levels of negative sentiment. EBAY and GOOG have the lowest.
- The three stocks with the highest absolute Short positions were YHOO (87MM shares), EBAY (46MM), and AMZN (30MM).
As Mark noted, FTD has the highest short interest ratio of any Internet stock. One year FTD chart below.