Now Apple Inc. is the biggest short on Wall Street, displacing Tesla Inc., which has held the title continuously since the early days of the COVID-19 pandemic.
A brief interest in Apple
is $18.4 billion as of Wednesday, while interest in Tesla is short
is $17.4 billion, according to research by S3 Partners. Tesla spent 864 days as the top shorted stock — since April 2020 — before Apple stepped in to regain its position, the financial data and analytics firm said. Both names are well ahead of third place Microsoft Corp.
which had $11.0 billion in short interest on Wednesday.
The gradual change largely reflects short sellers reducing exposure to Tesla rather than major changes in Apple’s active shorting, Igor Dushanivskyi, S3 Partners’ managing director of predictive analytics, wrote in a research note.
“While short interest shows us that the dollar is at risk, it does not show us the short trading activity that directly affects the share price,” he explained.
This means that Apple’s recent earnings also affect the overall bet against it. The stock is up 17% over the past three months and has outperformed the major indexes for the year.
“Increases or decreases in short interest are a function of the increase or decrease in shares shorted and the change in the share price,” he said. “Therefore, if short stocks remain static but a stock’s price rises, its short interest increases – but without shorting the stock, short selling, or short covering, the change in short interest has no effect on the rise or fall of the market price of the main stock.’
Tesla shares have also been hot over the past three months, up 37%, and there has been some short covering in Tesla over the past 30 days, Dusaniwski said. He added that he has seen an increase in the number of Apple shares shorted over the same period.
In further decline through early 2020, both names have seen short coverage on the web.
Dusaniwsky wrote that while short interest as a percentage of float is another figure investors look at when analyzing short activity, it “should only be used for stocks with similar market caps and float stocks,” and the Apple-Tesla comparison doesn’t fit on this account. Apple has a market value of $2.47 billion, while Tesla’s stands at $915 million.