Short sellers profit as shares of James Bond’s carmaker sink
A group of short sellers including Carmignac Gestion SA have wagered against Aston Martin Lagonda Global Holdings Plc within days of its listing, with a bearish position equal to about 6.6 per cent of the carmakers stock, according to data from Blacklight Technology Partners. And so far, those bets have paid off, with the shares plummeting more than 20 per cent since they started trading on 2 October.
Aston Martin had sought to benchmark itself against rival Ferrari NV in a London initial public offering that valued the company at GBP 4.3 billion ($5.7 billion). In a sign that some investors are sceptical about the companys prospects and valuation, short sellers started their attempt to bet against the company the very first day it started trading, according to people with knowledge of the matter.
Short sellers sell borrowed shares in the hope of buying them back at lower prices and pocketing the difference as profits. The first short position was recorded on 5 October, just three days after Aston Martin began trading, according to Blacklight, which compiles data based on reporting by hedge funds.
French money manager Carmignac Gestion became the first investor to disclose a short position on 11 October and raised its bet to 0.6 per cent of shares outstanding the next day, making Aston Martin its second-largest disclosed short bet, according to data compiled by Bloomberg.
A spokesman for Aston Martin didnt immediately respond to a request seeking comment. A representative at Carmignac Gestion declined to comment.
Some large European IPOs have struggled this year, especially amid the latest global rout in equity markets. Spanish oil refiner Cepsa became the latest to postpone its sale Monday amid muted investor demand for the stock. Dutch vehicle fleet operator LeasePlan Corp. last week abandoned plans for an IPO that could have valued it at as much as EUR 7.5 billion ($8.7 billion).