Shares of FirstFed Financial Corp. soared Thursday after an analyst raised questions about what effect naked short-selling might be having on the Los Angeles company's stock.

In a research note, Frederick Cannon, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., said short interest in FirstFed increased to 93% of the outstanding shares and 108% of the reported float as of Aug. 12. The figures were based on a report on short-selling from the stock exchanges.

In heavy trading, FirstFed's stock closed at $16.03 Thursday, up 33.6% from Wednesday's closing price. It was the second time this month the stock had climbed at least 30% in one day; on Aug. 20 it rose $2.76 after the company said in a Securities and Exchange Commission filing that it had reduced its exposure to adjustable-rate mortgages and mortgage-backed securities.

FirstFed has reported heavy losses in its mortgage portfolio of late as borrowers struggled to repay adjustable-rate loans as rates reset. It lost $35.5 million in the second quarter after taking a $90.2 million loss provision.

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