JetBlue Airways Corp. shares rallied this month to the highest since 2005, burning so-called short sellers who bet that rising fuel prices would derail the low-cost carrier's plans to cut expenses.
The Forest Hills-based company's stock has surged more than 50 percent since Oct. 10, the date of last month's short-sale statistics from the New York Stock Exchange.
Almost one-third of the shares available for trading were sold short, or borrowed and sold to profit from declining prices.
Short interest in JetBlue's shares climbed after oil prices surged to a record in July and the company suggested it may not make a profit in 2006.
JetBlue rebounded last month after crude futures dropped below $60 a barrel and the eighth-biggest U.S. airline by passenger traffic said it was ahead of cost-reduction goals that may produce $70million a year in savings and new revenue.
"For someone looking to short something on the way down, a lot of those reasons are quickly being reversed," said Tom Laming, who oversees $400 million including 523,020 JetBlue shares as president and chief investment officer of Trendstar Advisors Llc in Overland Park, Kan.
The shares extended their gain last week after US Airways Group Inc. proposed a merger with Delta Air Lines Inc. that may reduce competition on routes along the U.S. East Coast.
About 32 percent of JetBlue's 162.9 million shares available for trading, or float, was sold short last month.
JetBlue closed yesterday at $14.87, up 55 cents.
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