I have no concerns and love seeing shorts come into a stock that I am long and confident about. I agree that they are probably betting on a pullback but 5.9 million shares short is a pretty sizable position for this stock given the daily volume. I can't wait til the MSR deal is announced and 5MM shares need to cover. Nothing goes straight up w/o a pullback, but NCT is clearly worth significantly more than $7/share given the current $0.20/quarterly dividend which should go up to $0.25 by year end. I am very happy clipping my coupons knowing that the stock will be $8+ in 6 months at most. That is over around a 40% annualized return or an absolute 20% return over 6 months.
Actually, at about 5% of the float, it is rather low short interest. It only takes 4 days worth of volume to cover, so a short squeeze isn't in the cards.
But, with the stock hitting new highs, virtually all the shorts are under water, and short covering will help boost the price a bit. I certainly wouldn't be comfortable with a short position going into the earnings call.