Hammerson PLC (LON:HMSO) is increasingly finding itself targeted by short sellers with a large proportion of its shares now held in positions betting against the firm.
Shorting a stock is when an investor borrows shares and then immediately sells them in the hopes the price will subsequently fall so it can buy them back at a cheaper price, return them to the lender, and pocket the difference.
READ: Hammerson to continue selling off properties after lenders relax covenants
According to Short Tracker, on Wednesday afternoon around 13.1% of Hammerson’s shares are now held in short positions by investment funds, having risen steeply from around 5% at the start of the year.
The largest short position is held by London-based Caxton Europe Asset Management at around 4.33% of the company’s shares, followed by New York hedge fund Woodson Capital Management with 2.72% and Maverick Capital at 1.2%.
The increased pressure on Hammerson, which owns properties including the Birmingham Bullring and London’s Brent Cross shopping centre, comes as the firm continues to struggle against competition from online retailers, which reduce the need for large physical shopping spaces, and the more recent fallout from the coronavirus lockdown which has caused consumer footfall to collapse and left many of its tenant companies short of cash and, by extension, rent payments.
Hammerson will be looking to avoid the same fate of former competitor and Trafford Centre owner Intu, which collapsed into administration last month after failing to come to an agreement with its lenders over how to repay its massive debt pile, which amounted to over £4.5bn before it went bust.
READ: Intu collapses into administration after lender disagreement
However, the short sellers have so far been onto a winner with Hammerson, which has seen its share price decline just shy of 75% since the start of the year.
The shorter activity also means the frim can now claim the dubious title of most shorted stock on the LSE, followed by troubled post carrier Royal Mail PLC (LON:RMG) which has 9.5% of its shares held in short positions.
Hammerson shares were down 5% at 74.5p in mid-afternoon trading on Wednesday.