AAPL: Swarming

Interesting question over the last year is how much stock was shorted–thus leading to the big decline from $700 to $400. Who made money by shorting and how many Hedge funds were caught out?

Here’s the basic data for April 9th, 2013. From Short Squeeze.

-2.96

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Short Interest (Shares Short)
20,497,900

Days To Cover (Short Interest Ratio)
1.1

Short Percent of Float
2.18 %

Short Interest – Prior
19,432,600

Short % Increase / Decrease
5.48

view

Short Squeeze Ranking™
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% From 52-Wk High ($ 695.12 )
-39.11%

% From 52-Wk Low ($ 419.00 )
1.01%

% From 200-Day MA ($ 551.09 )
-23.20%

% From 50-Day MA ($ 446.89 )
-5.29%

Price % Change (52-Week)
-33.48%

Shares Float
938,720,000

% Owned by Insiders
0.03%

% Owned by Institutions
64.10%

Market Cap.
$ 400,000,000,000
Trading Volume – Today
2,876,150

Trading Volume – Average
18,248,900

Trading Volume – Today vs. Average
15.76%

Earnings Per Share
44.11

PE Ratio
9.59

Record Date
2013-MarB

From April 2012 to March 2013 the short volume was between 8 million and 22 million. The peak was in November of 2012 at over 21 million shares.

Settlement Date Short Interest Avg Daily Share Volume Days To Cover

3/15/2013           20,497,889 18,248,899                        1.123240

Read more short volumes: http://www.nasdaq.com/symbol/aapl/short-interest#ixzz2PzAEZjHC

Commentary from Fortune.

Basically lifted from Spooner: http://money.ca/you_and_your_money/2013/04/08/the-swarming-of-aapl/

Short interest in Apple shares increased 153% in the space of a year

Chart: mspooner

Chart: mspooner

FORTUNE — “Swarming,”writes Mal Spooner, a Canadian money manager and financial columnist, “is the term now applied to the crime where an unsuspecting innocent bystander is attacked by several culprits at once… Because swarming at street level involves violence, it is criminal. However in financial markets it is perfectly legal.”

And that, he says, is what happened to Apple (AAPL) last fall when traders detected weakness in what had been Wall Street’s darling stock and started selling it short in large quantities. As evidence, Spooner offers the chart above that shows short interest in Apple growing from 8.1 million shares in April 2012 to 20.5 million shares today — a market value roughly equivalent, he points out, to the gross domestic product of Malta.

“I’ve never claimed to be all that smart,” he writes with classic Canadian false modesty, “but I just can’t figure out how aggressively attacking a company’s share price, selling stock that the seller doesn’t even own, for the sole purpose of transferring the savings of innocent investors into one’s own coffers… is a noble thing. Isn’t it kind of like a bunch of thugs beating someone up and stealing his/her cellphone declaring it was the loner’s own fault for being vulnerable?”

One way for shareholders to avoid being swarmed, he suggests, is to instruct their brokers to stop letting short sellers borrow their stock to use against them. That can be accomplished by moving shares from a margin account to a cash account — which is exactly what some members of Investor Village’s AAPL Sanity group have decided to do.

“Everyone who can make this change to their account should do so,” writes a member who calls himself AnAAPLaDay. “Pass the word and make it go viral. Perhaps we can organize a flash mob and create a short squeeze!”

Whether a handful of retail investors can make a material difference when 64% of Apple’s shares are held by institutions is not clear. But it probably feels better than just standing there and getting mugged.

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