Singapore markets close in 32 minutes
  • Straits Times Index

    3,355.43
    -22.22 (-0.66%)
     
  • Nikkei

    27,402.05
    +55.17 (+0.20%)
     
  • Hang Seng

    21,958.36
    -113.82 (-0.52%)
     
  • FTSE 100

    7,779.82
    +18.71 (+0.24%)
     
  • BTC-USD

    23,832.85
    +813.56 (+3.53%)
     
  • CMC Crypto 200

    543.52
    +300.84 (+123.97%)
     
  • S&P 500

    4,119.21
    +42.61 (+1.05%)
     
  • Dow

    34,092.96
    +6.92 (+0.02%)
     
  • Nasdaq

    11,816.32
    +231.77 (+2.00%)
     
  • Gold

    1,974.50
    +31.70 (+1.63%)
     
  • Crude Oil

    76.73
    +0.32 (+0.42%)
     
  • 10-Yr Bond

    3.3970
    0.0000 (0.00%)
     
  • FTSE Bursa Malaysia

    1,489.89
    +4.39 (+0.30%)
     
  • Jakarta Composite Index

    6,890.57
    +28.31 (+0.41%)
     
  • PSE Index

    6,986.19
    -49.57 (-0.70%)
     

Hedge funds go into battle with Mike Ashley as bets against Asos hit all-time high

Mike Ashley
Mike Ashley

Prominent hedge funds from both sides of the Atlantic have gone into battle with Mike Ashley over his stake in Asos by increasing bets against the fast-fashion retailer.

Citadel, the Chicago fund founded by billionaire Ken Griffin, and Mayfair outfit Marshall Wace, are among a clutch of investors to have increased short positions in Asos since Mr Ashley's stake – made via Frasers Group – was revealed this weekend.

Some 8.4pc of Asos stock is on loan to short-sellers, the highest on record, and surpassing large bets placed against the company in 2016, according to regulatory filings.

The trades pit the hedge funds against Frasers, who has built a 5pc stake in the business – a sign that the British billionaire believes the business is undervalued.

Michael Murray, chief executive of Frasers, said: “It is not for us to comment on other positions, but our own investment reflects the long term strategic value we see in a partnership between ASOS and Frasers Group.”

Short-sellers borrow shares and sell them in the expectation that they can buy them back at a lower price before returning the stock to its original owner.

In total four hedge funds increased their short stakes on Monday with a fifth, GLG Partners, reducing its bet against Asos.

Asos has suffered from a run on its shares since the spring of 2021. In March last year the London-listed business was valued at more than £5bn. It is now worth just £600m.

It has been forced to launch a cost-cutting initiative after posting a pre-tax loss of £32m last week.

Asos is not the only fast-fashion retailer to have hit difficulties. Boohoo shares have fallen 64pc this year, while Missguided collapsed into insolvency in May.

By increasing their short positions against Asos, hedge funds may be expecting Asos to face further difficulties ahead of the crucial Christmas trading period.

Now with an estimated net worth of nearly $30bn, Mr Griffin ranks in the higher echelons of America's rich list. Also known for his philanthropy, he and his fellow partners in London donated £3m to help develop Covid vaccines.

Marshall Wace was founded by Sir Paul Marshall and Ian Wace in 1997 and ranks among Mayfair's best-known hedge funds. The two financiers have divided political allegiances, with Sir Paul previously a supporter of the Liberal Democrat party and Mr Wace a larger donor to the Conservatives in 2019.

Asos and Marshall Wace declined to comment. Citadel, Marshall Wace and Frasers did not respond.