On Tuesday, Apple, Inc AAPL shares ticked lower by about 0.5% after the stock gained 6% on Monday in anticipation of the big iPhone 12 event. Apple investors have high hopes for the first 5G-compatible iPhone, but short sellers are betting the sell-the-news drop is just getting started.
S3 Partners analyst Ihor Dusaniwsky says Apple’s short sellers have added $1.3 billion to their bearish bets in the month leading up to Tuesday’s iPhone event.
Apple now has $10.8 billion in total short interest, trailing just Tesla Inc TSLA with $25.4 billion and Alibaba Group Holding Ltd - ADR BABA with $14.3 billion on the list of the most heavily shorted stocks in the world.
Sell-The-News Trade? Apple is the most shorted stock in the tech sector, and Dusaniwsky said short sellers have increased their aggregate positions by 15.5% in the past month. In the week leading up to the iPhone event, short sellers added another 2 million shares to their bearish Apple bets.
Short sellers have taken a big hit on Apple in 2020. Dusaniwsky said Apple short sellers have endured $5.9 billion in net-of-financing mark-to-market losses this year. Apple short sellers added another $679 million in losses during Monday’s big rally alone.
“If AAPL stock rallies on good news we should expect a wave of short covering and shares shorted trend back down towards the 76 million share level we saw in early September,” Dusaniwsky said.
Benzinga’s Take: Analysts and investors are expecting the iPhone 12 to trigger a massive global upgrade cycle for Apple. However, with the stock up more than 100% in the past year, the market has already added more than $1 trillion in value to Apple in anticipation of the first 5G iPhone, and short sellers are betting it will be difficult for the device to live up to the hype.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.