In less than four months, we’ll be breaking out a lot of candles and celebrating the 125th birthday for the Dow Jones Industrial Average (DJINDICES: ^DJI). The market’s most-revered index has undergone more than 50 changes since its inception, and is today comprised of 30 brand-name, multinational companies.
Though all 30 Dow stocks have demonstrated that their operating models are time-tested, this hasn’t stopped short-sellers from making their mark. A short-seller makes money when a company’s share price declines (gains are capped at 100% since a company’s share price can’t go lower than $0). Conversely, losses for short-sellers are unlimited since there’s no upside ceiling on a company’s share price.
A quick screen of the Dow’s 30 components shows five whose short shares held relative to float is higher than 2%.