Ocado has topped the Financial Conduct Authority’s (FCA) London’s most-shorted stocks list, after it swung to a £501mn loss, resulting in short-sellers turning on the online-only grocer.
As a result, over 6% of the supermarket’s stock is currently out on loan to hedge funds, the highest in almost five years, which will make money if its share price drops.
According to This is Money, the boost the Ocado received due to the Covid-19 pandemic is “well and truly over”.
Ocado is ranked in the Top350 of the RXUK Top500 research, click here to download.
This comes as last month the group reported a 3.8% drop in sales to £2.2bn, attributing the “challenging market” to its losses, as more shoppers post-pandemic flock to discounters due to the ongoing cost-of-living crisis.
Shares have decreased by almost a third since this time last year when only 0.52 per cent of its stock was being shorted.
Independent retail analyst Richard Hyman told This is Money: “If you look back before the pandemic then Ocado was often massively shorted – this is a return to form.
“I think the thing is that the market doesn’t have any of the confidence in Ocado’s business model that the leadership team and founders have.”
InternetRetailing has contacted Ocado for comment.