Irish man Patrick Coveney, group chief executive of UK food operator SSP Group, would be forgiven for being a little concerned lately about the appearance on its share register of a number of new names GLG Group, Qube Research, Squarepoint and WorldQuant, who are taking short bets against the company’s share price.
A short bet is a risky trade in which the investment fund borrows shares in a company from a broker, sells them on the open market, and then waits for the shares to drop in value so that they can buy the now much cheaper shares, return them to the broker, and pocket the difference as a profit.
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GLG Partners has been steadily building its short bet in recent weeks, which now stands at 1.20 per cent of SSP Group’s shares, roughly equivalent to more than £14 million (€16.5 million) worth of shares. Qube Research, a $20 billion quantitative hedge fund run by Pierre-Yves Morlat, has a position of just over 1 per cent. Max Fortin’s Squarepoint Ops has a 0.70 per cent position. And Igor Tulchinsky’s WorldQuant, a data driven hedge fund, has a 0.52 per cent bet.
In all, the value of shares being bet against is about £41 million. And while it’s far from the largest short bet in the London stock exchange, Coveney has been here before. During his final years with Irish convenience food group Greencore, short traders were a persistent feature, and at one point in early 2018 about 15 per cent of the shares in the company were subject to short trades.
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SSP’s shares have slipped significantly in recent months from a price of around £2 at the end of May to their current price of just over £1.50. And that’s down from £2.60 a year ago and £3.50 in 2021.
Coveney will be hoping he can get those numbers going back in the right direction soon.
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