Wirecard: Bears picking over the bones
02 July 2020 Berlin
Image: Shutterstock.com
Hedge funds are “not done yet” with the beleaguered German fintech giant Wirecard, according to Ortex Analytics, despite cost-to-borrow skyrocketing 140 percent in the past week.
Trading was briefly halted when the Wirecard filed for insolvency on 25 June but it has not yet been delisted, as auditors and regulators wrangle over what to do with the disgraced DAX 30 member.
The utilisation of shares available to lend dropped 41 percent over the seven days prior to 30 June, following a plummet in share price of more than 90 percent as allegations of accounting fraud mounted and arrests of the company’s senior management became known.
Just over 10 million shares were still being shorted, as of 30 June, representing 8.5 percent of the total free float, according to Ortex figures.
In fact, a number of hedge funds have increased their short position since the company started insolvency proceedings last week, while some have opened new positions.
The largest short position as of 1 July was held by Coltrane Asset Management, which increased its position to account for 1.28 percent of the total free float. It is closely followed by Slate Path Captial, which accounts for 1.25 percent of available shares.
Greenvale Capital has also increased its position to claim the third-largest position with 1.15 percent of the free float.
Newcomers include Capital Fund Management, which opened its first reportable short position with 1.21 million shares on the 26 June, while Ennismore Fund Management entered the fray with a short position of 721,000 shares on the 25 June.
Meanwhile, Coatue Management, which held the largest short position of 2.8 million shares on as of 24 June, closed out its position a day later to at least below the currently-reduced EU reportable threshold of 0.1 percent of available shares.
Other former-pack leaders include TCI Fund Management, which had a short position worth 1.87 million shares since 28 April, and Marshall Wace, which held a short position of 1.6 million shares, also closed out to below the threshold on 25 June and 26 June respectively.
“Whilst some took profits after last week’s insolvency announcement, others have been building their position in recent days as the share price shows some upward movement,” notes Peter Hillerberg, co-founder of Ortex Analytics. “For anybody that thought the Wirecard saga was over, it’s clear that short sellers are not done yet.”
Trading was briefly halted when the Wirecard filed for insolvency on 25 June but it has not yet been delisted, as auditors and regulators wrangle over what to do with the disgraced DAX 30 member.
The utilisation of shares available to lend dropped 41 percent over the seven days prior to 30 June, following a plummet in share price of more than 90 percent as allegations of accounting fraud mounted and arrests of the company’s senior management became known.
Just over 10 million shares were still being shorted, as of 30 June, representing 8.5 percent of the total free float, according to Ortex figures.
In fact, a number of hedge funds have increased their short position since the company started insolvency proceedings last week, while some have opened new positions.
The largest short position as of 1 July was held by Coltrane Asset Management, which increased its position to account for 1.28 percent of the total free float. It is closely followed by Slate Path Captial, which accounts for 1.25 percent of available shares.
Greenvale Capital has also increased its position to claim the third-largest position with 1.15 percent of the free float.
Newcomers include Capital Fund Management, which opened its first reportable short position with 1.21 million shares on the 26 June, while Ennismore Fund Management entered the fray with a short position of 721,000 shares on the 25 June.
Meanwhile, Coatue Management, which held the largest short position of 2.8 million shares on as of 24 June, closed out its position a day later to at least below the currently-reduced EU reportable threshold of 0.1 percent of available shares.
Other former-pack leaders include TCI Fund Management, which had a short position worth 1.87 million shares since 28 April, and Marshall Wace, which held a short position of 1.6 million shares, also closed out to below the threshold on 25 June and 26 June respectively.
“Whilst some took profits after last week’s insolvency announcement, others have been building their position in recent days as the share price shows some upward movement,” notes Peter Hillerberg, co-founder of Ortex Analytics. “For anybody that thought the Wirecard saga was over, it’s clear that short sellers are not done yet.”
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