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Pharma's Market

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Dec.02

11:58 AM ET

Tuesday, 2 Dec 2008

Another "Short" Story About Pfizer & Dendreon

Posted By:Mike Huckman

Topics:Stock Market | Medicine | Pharmaceuticals

Sectors:Health Care Equipment and Services | Health Care | Pharmaceuticals

Companies:Bristol-Myers Squibb Co | Dendreon Corp | Pfizer Inc

AP
I know that simply pointing this out will draw the ire of certain Pfizer investors who happen to read this blog, but the fact is that PFE [PFE Loading... () ] is the only major pharmaceutical company whose short interest is big enough to crack the Barron's Top-40.

PFE comes in at #20 with 56,385,734 shares sold short as of November 14th. But the short position in the stock shrank by 12,000,000 from Halloween to the middle of last month. That decline ranks as the seventh-biggest among stocks listed on the New York Stock Exchange. CNBC's parent company, General Electric [GE Loading... () ] , saw the sixth-largest drop. The short list appears in this week's issue of Barron's.

Investors who "short" a stock are betting the price will fall and hope to make money if/when it does. So, PFE "shorts" have been pocketing some profits as the stock has fallen about nine bucks over the past year or so.

Turning to the Nasdaq, the short interest in the baby biotech Dendreon continues to go down. DNDN [DNDN Loading... () ] is no longer in the Barron's Top-40 of Nasdaq companies with the largest short positions or on the Top-50 list of largest short interest ratios. But the decline from Oct. 31st to Nov. 14th did place Dendreon 14th among the 15 Nasdaq stocks with the biggest short interest drops during that period. Nearly 20,000,000 shares were still held short by the middle of last month--a drop of about four-and-a-half million or 18 percent.

Overall, the short interest fell nearly six percent on the Nasdaq and nearly two percent on the NYSE. So, maybe the changes in PFE and DNDN were market driven or maybe they're a sign that bearish sentiment, at least on those two stocks, is dissipating.