It's not easy being a naysayer. Some of the major market indexes are trading near all-time highs, and betting against a company to profit from its decline when it falls by selling its shares short may seem like a bad wager. 

Short interest declined through the latter half of last month, but there were actually a few companies that hit new 52-week highs in bets placed against them. Let's take a close look at five companies with the largest number of shares sold short over the past year as of mid-April, according to the latest data from the exchanges.


April 30

52-Week Low

Coca-Cola (KO 0.02%)

54.8 million

26.5 million

Zynga (ZNGA)

64.7 million

21.4 million

Kandi Technologies (KNDI -0.54%)

5.7 million

0.7 million

Comcast (CMCSA -1.10%)

60.2 million

18.7 million

Capstone Turbine (CPST)

47.8 million

33.9 million

Source: Barron's.

Feeding the bears
We can start with Coca-Cola. Growth has slowed dramatically at the world's largest beverage company. Folks are swearing off sugary soft drinks, and diversification into other beverage categories hasn't happened soon enough. Global unit case volume climbed a mere 2% in the latest quarter, with operating income and earnings declining slightly. Despite Coca-Cola's healthy 3% yield -- something shorts must pay out themselves on the stock that they're borrowing -- its short interest has more than doubled since last summer.

Zynga is playing Bears With Friends: The company behind FarmVille, Draw Something, and Words With Friends has fallen out of favor. Its business peaked in 2012, and things aren't getting any better. Gross bookings tumbled 38% last year, and it has yet to bottom out. Bookings slumped 30% in the latest quarter. Its larger rival went public two months ago, shedding new light on Zynga's weakness.

Kandi seems to be doing things right. Unlike the stagnant Coca-Cola and the fading Zynga, the Chinese maker of electric vehicles is on a tear. Revenue soared 176% in the latest quarter, fueled by the success of Kandi's auto-sharing platform in Hangzhou. Why are so many people shorting a stock that's growing so fast? A fair explanation is that it was toiling away in obscurity a year ago, relying largely on go carts and ATVs before shifting its focus to passenger vehicles. Success has drawn attention from bulls and bears, but it's a risky short given its heady growth.

Comcast may also seem like an unusual short. After watching its video customers cut the cord for years, it's coming off back-to-back quarters of sequential gains. However, the spike in shorts can be partly attributed to hedging activity given the sector consolidation that's taking place as Comcast tries to grow its cable empire.

Finally, Capstone Turbine has more skeptics than it has generally faced over the past year. The maker of co-generation turbines that run on many different fuel types has proven vulnerable to its shorts this month -- the stock has surrendered 27% of its value so far in May. The slide started after a dilutive secondary offering, and things got worse when the prospectus for the offering revealed weaker than expected fiscal results for the March quarter. Capstone Tubrine's low stock price makes it volatile, but that's not scaring away the shorts, who hope they don't get thrown off this mechanical bull.

Don't lose your head
Investors on the long side of these five stocks don't need to panic. Many of these stocks have been able to climb the proverbial wall of worry despite having large short positions. If anything, bullish developments could trigger short squeezes, which would drive the prices here as skeptics cover their negative wagers. However, it's still important to keep in mind that a lot of people think these stocks are going down. Bulls and bears can't both be right.