David Herro, Harris Associates’ chief investment officer, recently said that he loves Dell (NASDAQ:DELL) as an long-term buy. A lot of short sellers don’t see it that way.
The short interest in Dell rose 7.2 million shares to 49 million, making it the fifth largest move up for any company listed on the Nasdaq. The number is as of April 15 and compares to figures on March 30.
The main case against Dell may be Apple (NASDAQ: AAPL). Steve Jobs’s company sold 2.2 million Macs in the first quarter, up 51%. That puts the run-rate for Mac sales this year at almost 10 million per annum. That number is getting large enough to unnerve Dell and HP (NYSE: HPQ).
The other problem Dell has is that the overall slowdown in the economy in the US, the company’s largest market, is likely to reduce the rate at which companies and people buy new PCs.
With the broad PC market in trouble and Apple picking up market share, it is getting hard to make a case for Dell’s stock, long or short-term.
Douglas A. McIntyre