Short sellers bet £800m against M&S

Marks & Spencer has seen short selling of its stock skyrocket to record levels following last week’s profit warning from its rival John Lewis.

Both public and private investors have shorted a collective £800 million in M&S stock, a practice which allows traders to cash in on a company they believe is about to experience a sharp drop in share values.

According to figures from IHS Markit, 17 per cent of M&S’ stock has been shorted against, coming second in the retail sector to only its rival department store Debenhams, which currently has 18 per cent of its shares shorted against.

Financial powerhouses such as AQR Capital Management, Citadel Europe, GLG Partners, Marshall Wace and most recently Blackrock Institutional Trust Company have all bet against the retailer.

In May, the retailer posted a 62.1 per cent plunge in annual pre-tax profits over the last year, which is mostly attributed to costs incurred by its five-year turnaround strategy, which is set to see it close around 100 stores by 2020.

Investors have increasingly been betting against the retail sector following numerous high profile collapses including Toys R Us, Maplin and Calverton Brands, while swathes more have entered into insolvency proceedings known as CVA’s.

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