Although Apple signed a $578 million deal with GTAT for sapphire glass in November, analysts have noted the "slowing pace" of Apple shipments, according to Markit analyst Simon Colvin.
Rubicon, which actually specializes in sapphire products unlike the multifaceted GTAT, has 26.9 percent of its outstanding shares on loan, according to Markit. Part of the bear case for Rubicon is that GTAT's Apple deal has taken away major opportunities for sapphire glass manufacturers, said Andrew Uerkwitz, an executive director and senior analyst at Oppenheimer & Co. who covers the company.
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But short sellers are also betting that Rubicon's Asian competitors can quickly increase capacity and drive prices down, said Uerkwitz, who has a "hold" rating on the stock according to FactSet. Still, opinions on the stock are "bifurcated to the extreme," he said, explaining that bulls are excited about the resurgence of LEDs with the GTAT-Apple deal, and anticipate that Rubicon may announce some new clients.
Uerkwitz, however, said he is not anticipating much from Rubicon's earnings report this week.
"We're not expecting fireworks," he said.
Another area with several components on the most shorted list is biotechnology and pharmaceuticals: Celldex, Mallinckrodt and Ariad Pharmaceuticals all have more than 20 percent of outstanding shares on loan.
Mallinckrodt, Colvin noted, is acquiring heavily shorted Questcor Pharmaceuticals, so shorts are switching positions to the purchaser.
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Short sellers are not the only ones seeing some weakness in biotech firms. In a July policy report, Fed Chair Janet Yellen said that valuations "appear substantially stretched" for smaller biotechnology companies, "despite a notable downturn in equity prices for such firms early in the year."
Here's Markit's full list: