Short Monitor- Thomas Cooked, tarred and feathered

Published on 30-09-2019 09:41:54


Source: Company accounts and Edison Investment Research

Source: Company accounts and Edison Investment Research

Unsurprisingly, Thomas Cook Group was the most shorted UK company at the time of its compulsory delisting on 27 September, with 10.7% of its share capital shorted. Brexit uncertainty and surprisingly pleasant British weather has resulted in customers holidaying at home rather than abroad, illustrating an increasingly difficult environment for the UK travel and leisure sector. Thomas Cook was unable to survive in this challenging environment due to its worsening financial leverage and lack of product diversification.

The 9.9% of Metro Bank’s issued share capital that is currently shorted was shorted entirely in September. This shorting activity was triggered by Metro Bank’s shares plummeting 35% when the bank announced that it had decided to cancel its latest bond issue. The FTSE’s price increased in line with the total number of shorts that occurred in September, reversing the typical inverse relationship between the two.