What would you rather bet against: The future of newspapers — or the future of the home mortgage business? Short-sellers have been loading up against the former. But we think that might change once they see the NY Daily News’ new pageview-generating schemes. Alan Mutter:
Investor bets against Lee Enterprises and McClatchy were more than twice as big last month as those against the shares of Fannie Mae, one of the mortgage giants whose perceived instability jolted the financial markets.
The wagers placed against a stock, which are known as short sales, give new insight into the long-running selloff that drove seven newspaper stocks to record lows in a single day on Friday…
A staggering 38.6% of LEE’s stock was sold short in mid-June. That is 2.7 times greater than the 14.1% of Fannie Mae sold short at the same date. And it is almost identical to the 37.2% short position at the same time at IndyMac Bancorp, the insolvent bank seized Friday night by federal authorities.
The 28.3% short position at MNI was 2.2x greater than the percentage of shares shorted at Freddie Mac, the other federally-chartered mortgage insurer, whose shares last week plunged along with those of Fannie Mae. Only 12.8% of Freddie Mac was sold short in June.
The average percentage of short shares at the 14 publicly traded newspaper companies in June was 15.5%. Short positions were in double-digits at nine of them.
By comparison, the short positions were respectively 13.7%, 6.0% and 3.8% at Lehman Brothers, Starbuck’s and Yahoo, three companies that have faced their own share of bad news in recent weeks.
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