Short interest in Level 3 (LVLT) rose 13.4 million shares to 133.4 million in July giving it the largest short position of any stock traded on Nasdaq.
Over the last six months, the stock is down 5% and it has had a sharp drop recently from $6.42 to $5.82, just ahead of earnings.
Level 3”s debt remains that primary concern about the company. Operating profit still barely handles debt coverage. The company has also made a number of acquisitions recently, and some Wall St. investors are worried that management may be stretched too thin to both operate the company and handle integration risks.
As Morningstar recently wrote: "Level 3 isn’t totally out of the woods yet."
Douglas A. McIntyre