For the period ending June 15, short sellers in the stock market made some huge bets against the largest companies listed on the NYSE and NASDAQ according to data from each exchange. Leading the charge were financial stocks like Citigroup (C) and Bank of America (BAC), but also tech mainstays like Microsoft (MSFT) and Cisco (CSCO).
The most stunning negative bet was the 290% increase in the short interest of BP plc (BP) which rose to 25.7 million shares. Though massive in scope, the downside betting against BP is no real surprise to anyone who has been watching the Gulf oil spill.
Short sellers also attacked the biggest financial stocks. Share sold short in Citigroup (C) rose 14% to 497 million shares. The short interest in Bank of America (BAC) was up 14% to 97.8 million. And shares short in General Electric (GE), considered a de facto bank because of its huge financial arm, rose 23% to 73.9 million. Investors are clearly betting that financial reform will be bad for financial company earnings.
Short sellers also thrashed big tech. Shares short in Microsoft (MSFT) rose a breathtaking 42% to 80.8 million. The success of Google (GOOG) must be driving shareholder pessimism. That and the lack of any coherent plan for getting market share in the mobile business.
Shorts also attacked Cisco (CSCO) and Oracle (ORCL). Cisco’s short interest rose 26% to 50.3 million shares. The short interest in Oracle rose 11% to 27.8 million. Oracle’s strong earnings may cause some short covering today.
Short sellers may not always be right, but their bets are a case of putting their money where their mouths are. And, that is worth some investor attention.
As of this writing, Doug McIntyre did not own a position in any of the stocks named here.