Flutter Entertainment among most shorted stocks after Stars Group takeover bid
Several prominent hedge funds, including Sand Grove Capital Management, increase total short positions to almost 5% of Flutter’s market cap
Flutter Entertainment has been the target of a surge in short positions taken by hedge funds since the Paddy Power owner announced its takeover of The Stars Group.
Several hedge funds have taken short positions of more than 0.5% in the London-listed operator in recent weeks, including Sand Grove Capital Management which holds the largest short at 1% of Flutter’s share base.
A total of seven funds have shorted Flutter since 4 October, accounting for 4.9% – or almost £290m – of the operator’s current £5.9bn market capitalisation.
AQR Capital Management took the next biggest short position after Sand Grove Capital Management at 0.8%, followed by BlackRock Advisors at 0.7% and Alpine Associates Management, BlackRock Investment Management, Carlson Capital and Westchester Capital Management all at 0.6%.
Any fund which takes a short position of more than 0.5% of a company’s share base must disclose the trade with the UK financial regulatory body the Financial Conduct Authority.
Flutter’s share price was 7,632p at on the London Stock Exchange at the time of writing, down from a high of 9,194p shortly after its deal with the PokerStars was announced.
The deal could feasibly face opposition from UK competition authorities thanks to the high crossover in account holders at Paddy Power and Sky Bet.
Canaccord Genuity said in a note last week: “If the enlarged group had to make remedies in the UK, we believe the logical decision would be to sell the Paddy Power digital and retail businesses given the importance of Sky Bet to developing the FoxBet model in the US and the global appeal of Betfair.”