Apple Short-Squeeze? Pacific Crest Bullish on Corporate Mac Use
August 21, 2007, 11:37 am Apple Shares Rise: A Short-Squeeze? Pacific Crest Bullish on Corporate Mac Use
Posted by Tiernan Ray
Apple (AAPL) shares are jumping this morning on no specific news around the company, and it could well be a short-squeeze, at least, according to Pacific Crest analyst Andy Hargreaves, who says shorts may be taking profit in advance of what could be rising corporate interest in the Macintosh.
At last count, 30.52 million shares were short in Apple stock in July, about 3.5% of the float and an increase from the prior month. After a bump-up following the iPhone, the shares had worked their way down to $111.62 last Thursday.
�My guess is short interest had gone up in recent weeks,� says Hargreaves. �With the stock beginning the year at $100, after rising to $140, some shorts have made a lot of money and it was time to take profits.� That, and the fact that, �We�re in a market where there�s a dearth of information, and people are latching onto or over-reacting to every piece of information.�
Ah, but Hargreaves has a piece of information to offer of his own. This morning, he hosted an investor call with a computer reseller and some other parties to get some insight into where the Macintosh is headed in corporate IT departments. Hargreaves has a warm, good feeling that the Mac�s profile in corporate IT will improve over the long term.
�The upshot of the call is there will be more Macs in the enterprise,� says Hargreaves. �The number one reason is consumer demand: the users of Macs are executives, and that consumer demand is pulling Mac into the enterprise. Essentially, there are a lot of the VP- and above-level people, people who travel a lot or are upper income bracket, who want them, and when it comes from those people, IT staff are more likely to listen.�
Hargreaves says research indicates corporate IT are also increasingly willing to at least tests Macs to determine their compatability with enterprise. A catalyst in the near future may be the release of the server version of Apple�s next version of its operating system, �Leopard,� suggets Hargreaves. He says changes to the way Leopard server handles calendar and e-mail functions could make the software more friendly to IT staff. I would suppose he means things like integration with Microsoft�s (MSFT) �Outlook� organizer and the like.
Hargreaves says shorts may be looking at things like Leopard server, and �shorts look at it as a positive data point and figure it�s an opportunity to cover their shorts,� since a lot of them have made a bunch of money.
Hargreaves�s is not changing his rating on Apple shares, which stands at Outperform. Nor is he changing any estimates based on what is a long-term outlook for improving Mac corporate sales.
Apple shares this morning were up as much as 5.4% and are now up almost 4% at $127.07.