Home Hedge Funds CITY WHISPERS: Short-sellers’ bets against Boohoo hit record high

CITY WHISPERS: Short-sellers’ bets against Boohoo hit record high

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Out of fashion: Boohoo shares have already tumbled two-thirds this year

CITY WHISPERS: Short-sellers’ bets against Boohoo hit record high as winter cost-of-living crisis looms even for budget fashion retailers

Short-sellers’ bets against Boohoo hit a record high last week as the winter cost-of-living crisis looms even for budget fashion retailers. 

The positions built by hedge funds, which make money if share prices fall, rose to 8.7 per cent, equal to about £45million, before falling back down to 8.1 per cent on Friday. 

It’s perhaps a bold bet as the shares have already tumbled two-thirds this year, with an investigation into greenwashing by the Competition and Markets Authority. 

Out of fashion: Boohoo shares have already tumbled two-thirds this year

Out of fashion: Boohoo shares have already tumbled two-thirds this year

But Marshall Wace, Citadel, Capeview and Ennismore are among well-known hedgies that think Mahmud Kamani’s fast-fashion firm has further to fall. 

Appointing Kourtney Kardashian Barker – who will help Boohoo discover ‘more about sustainability and style’ – as an ambassador seems to have done little to allay these fears. 

Aston Martin also grappled with record-high shorts, with 7.4 per cent of its stock on loan earlier this week, though this has fallen back to 6.5 per cent.

In The Style faces unrest at annual meeting  

Another retailer, In The Style, may get a bloody nose at its annual meeting this week after proxy adviser ISS urged investors to oppose its pay arrangements.

ISS says a long-term share award for boss Sam Perkins is not conditional on performance goals and vests relatively quickly. 

The only condition to receiving the shares – worth £425,000 at current prices – is Perkins’ continued employment. 

He joined the firm from Very in January. 

Crispin Odey still in IGas

When Crispin Odey’s hedge fund made a move into shale minnow IGas in August, it was something of a gamble. 

By the time Odey Asset Management’s 3.7 per cent holding was disclosed, shares in the group had already trebled since the start of the year. 

The stake now stands at 7 per cent. 

Rumours of Liz Truss lifting the moratorium on fracking sent IGas shares soaring. 

But since then the AIM-listed stock has gone into reverse and Odey’s latest increase in its stake came the day before another sharp drop – triggered by a change of management that saw boss Stephen Bowler leave with ‘mutual consent’. 

Longer-term backers have heftier returns. Its stock is still up by 466 per cent this year. 

Darktrace fate still with private equity 

Takeover talks between Darktrace and US buyout group Thoma Bravo may have fallen apart this month, but the fate of the cyber security firm still remains with private equity ownership, according to one source close to the deal. 

Thoma Bravo, whose investors are thought to have baulked at the price, cannot table a new offer for another six months even if it wanted to. 

But the source said a private equity player would be likely to make a swoop for the £2.5billion group in the coming 12 months. 

Whether the City would welcome another buyout of a British tech firm is another matter. 

                                                                                                                         Contributor: Amy-Jo Crowley 

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