As Confidence In Sun (SUNW) Flags, Short Interest Increases

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Over that last six months, shares in Sun Microsystems (SUNW) are down about 17%. From early 2006 until this April, the stock was running hot and was up over 70% at one point.

But, concerns about whether Sun can maintain its share of the server market have emerged. Sun has only 1% of the fast-growing blade server market, which is dominated by HP (HPQ) and IBM (IBM).

Rating service Fitch recently voiced its concern about "Sun’s lacklustre organic revenue performance for data management products so far in fiscal 2007 and the long-term effect on server demand.".

Short sellers have taken note, adding 11 million shares to Sun’s total of 40 million.

Douglas A. McIntyre