Online fashion retailer Asos has been hit by a large-scale short attack from hedge fund, ShadowFall.
ShadowFall’s head of investment, Matthew Earl, named the “dark destroyer” has built a short position in Asos worth about £4 million, according to The Sunday Times.
The online fashion retailer is the second most shorted stock in the FTSE 250 with 10.98% of its shares on loan, S&P Global Market Intelligence has revealed.
Asos features in the 2023 European Fashion Sector Report, click here to download.
Short sellers buy shares before selling them back to the market, intending to purchase them back for less money at a later date, profiting from a drop in the share price.
Online fashion retailers like Asos have fallen out of favour in recent months after failing to convert their lockdown-era growth into post-pandemic profits.
This comes as shares at Asos have fallen over 44% of shares in the last year, bringing its market capitalisation to around £780 million.
In its annual results posted last October, Asos reported a £32 million annual loss, as customers cut back on their spending due to the ongoing cost-of-living crisis.
Since then, the company’s new CEO José Antonio Ramos Calamonte has attempted to restructure amid a 12-month turnaround plan which focuses on several “decisive, short-term operational measures to simplify the business”.
It also includes steps to “unlock longer-term sustainable growth”.
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