The pressure has been on for Apple Inc. lately, and it seems the bears have been primed to pounce.
According to fresh data, Apple AAPL, +0.80% ranks third worldwide when it comes to the value of short interest in its stock. Short sellers borrow a stock in order to sell it and then buy it back at a lower price, profiting off the difference.
As of Friday, short interest on Apple hit $9.1 billion, noted financial analytic firm S3 Partners. Apple sits just behind Tesla Inc. TSLA, +4.72% which has short interest of $10.5 billion, and Alibaba Group Holding Ltd. BABA, -1.78% , at the top with $16.7 billion.
Most of this year’s increase in short interest happened from April, when positions were boosted by $2.3 billion in less than six weeks, said Ihor Dusaniwsky, head of research at S3, in a note.
However, short volume has been trending lower for more than a year. Even though there have been occasional pops higher, these have dissipated quickly.
Apple, which crested to just over $156 per share in May, has seen some bumpy recent sessions. While shares rebounded Tuesday, a 3.9% tumble on Friday as part of a bigger tech selloff has left shares 4% weaker in June so far. The iPhone maker has suffered two ratings downgrades, a rarity in itself, in the past week, both warning that investors probably can’t juice shares too much more based on optimism over the next iPhone cycle.
Still, the iPhone maker’s shares are up 26% year-to-date, handily outpacing a 9% gain for the S&P 500 SPX, +0.45% Its short sellers have made more than half-a-billion dollars in the last two trading days, as investors appear to be targeting Apple as a near-term underperformer in the sector, said S3.
“It will be interesting to see if this is a longer-term trade with short interest remaining at or above the $9 billion level, or if we will see an avalanche of buy to covers to realize short-term profits if AAPL’s stock price rebounds after this short-term price slump,” said Dusaniwsky.
Tesla, meanwhile, has soared 68% so far this year. The bull and bear tug of war for the electric-car maker has been going on since 2014.