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Bank of America Short Interest Jumps

Short sellers piled on Bank of America in the last half of July following the release of its second-quarter results.
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Bank of America

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saw short interest rise by about 19% following second-quarter earnings that were poorly received by investors.

Short interest on Bank of America rose to nearly 124 million shares in the second half of July, from about 104 million shares in the first half of the month, according to

New York Stock Exchange

data released late Tuesday.

The other money-center banks did not see a similar rise.

Wells Fargo

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saw just a 5% jump in short interest, to 57 million from 54 million in the first half of July, while short interest in

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JPMorgan Chase

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ticked up by only 3% to 33 million.


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, on the other hand, saw short interest decline to 439 million shares from 450 million during the previous reporting period. The NYSE releases outstanding short interest data to the public twice a month for its 100 most-heavily-shorted ticker symbols.

The rise in short activity in Bank of America shares is consistent with the stock's performance over the past month. Bank of America shares have lost 11%, while the other three U.S. banking giants have all seen their stock prices drop by less than 3%.

A significant reason for the negativity around Bank of America appears to be management comments regarding lost revenues from so-called interchange fees--which banks charge to retailers for every debit card transaction. Bank of America said new legislation that caps those fees will cause it to take a $7 to $10 billion goodwill impairment charge in the third quarter and are likely to reduce revenues by $1.8 to $2.3 billion annually.


Written by Dan Freed in New York


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