Charles Incledon, Client Director quoted in Proactive Investors 26th September 2022
The most shorted company in the past year has been online fast fashion retailer Boohoo, with 215** major short positions taken out against the company in the last year. This is followed by B&Q owner Kingfisher (185 major short positions) and another online fast fashion retailer, Asos (170 major short positions).
Shorting a company is essentially betting that a company’s share price is going to fall and allows investors to profit from declining share prices. Therefore, in falling equity markets it is a way in which investors can continue to make money.
The UK’s recession and cost of living crisis have dampened consumer demand and contributed to a significant fall in profit margins at several retailers. This has led to a weakening in investor sentiment towards the retail sector.
“Retailers are expected to bear the brunt of the UK’s cost of living crisis and the share prices of many of the UK’s e-commerce giants have already fallen heavily. Many of those short positions are still in place, meaning investors think there’s more to come.”
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