Short Stocks: Bets build against Amazon, Moody's

NEW YORK, Nov 10 (Reuters) - Short interest on the Nasdaq and NYSE fell in the second half of October, the exchanges said on Tuesday, reversing a rise in the first half of the month, as the equity rally showed few signs of turning around. For details, see [ID:nN10286162]

The following list shows stocks that saw increased short-selling and key recent news events for those companies. The data reflect short trades with a settlement date of Oct. 30 compared to the previous period ended Oct. 15.

Investors who "short" securities borrow shares and then sell them with the expectation the stock will fall so they can buy the shares back at a lower price, pocketing the difference.

For factboxes see [ID:N10327452] and [ID:N10196132].

AMAZON.COM INC (AMZN.O)

Short interest in online retailer Amazon.com rose 25.5 percent to 21.4 million shares in late October, a period in which the shares hit a 10-year high, prompting short sellers to see room for the shares to move down. The shares moved sharply higher after the company posted robust third quarter results that beat forecasts and said holiday sales may also be impressive. [ID:nN2395206] and [ID:nN2238215]

The 21.4 million shares account for about 4.9 percent of Amazon.com outstanding stock, according to Thomson Reuters data.

ZIONS BANCORP (ZION.O)

Short interest in the western U.S. banking chain rose 17.4 percent to 31.8 million shares in late October. During that period the bank posted its fourth straight quarterly loss as the lender had to set aside more money to meet losses from bad loans.

Trading in put options in the company's stock spiked recently as the share price fell nearly 30 percent from mid-October. Buying a put option gives investors the right to sell a stock at a certain price and can be used as insurance against further declines. [ID:nBNG468572] and [ID:nN10333715]

The 31.8 million shorted shares account for about 23 percent of shares outstanding, according to Thomson Reuters data.

CITIZENS REPUBLIC BANCORP INC (CRBC.O)

Short interest in the loss-making Midwestern bank rose 21.9 percent to 42.9 million shares after the company said loan loss provisions and expenses spiked during the last quarter even though its quarterly loss was narrower than expected. [ID:nBNG383901]

The bank also filed for a $700 million mixed shelf towards the end of the month, which, if exercised and used to issue equity, would dilute shareholders and drive down the stock price.

The shares have fallen 16.7 percent since mid-October.

The 42.88 million shorted shares amount to 10.9 percent of the company's outstanding stock, according to Thomson Reuters data.

XEROX CORP (XRX.N)

Short interest in the office equipment maker rose 29.6 percent to 61.1 million shares.

Xerox reported third-quarter results in late October that showed quarterly profit was halved, highlighting the slowdown in office equipment spending. While cost cuts helped the company beat Wall Street's expectations, customers remain hesitant to buy new equipment.

Short interest amounts to 7 percent of the company's outstanding stock, according to Thomson Reuters data.

MOODY'S CORP (MCO.N)

Short interest in the company rose 17.9 percent to 34.3 million shares. Bets against Moody's accelerated as the U.S. House of Representatives Financial Services Committee approved legislation at the end of October that would make credit rating agencies more tightly regulated.

On Tuesday a draft bill was released by a leading U.S. senator that would see the agencies, accused of assigning top ratings to shoddy securities, exposed to greater liability. [ID:nN10357241]

Short interest makes up 14.5 percent of the company's outstanding stock, according to Thomson Reuters data.

(Reporting by Edward Krudy and Leah Schnurr; Editing by Andrew Hay)