Hedge fund PSQUARED placed £20m bet on Boohoo’s shares falling

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Hedge fund PSQUARED placed £20m bet on Boohoo’s shares falling, and will already be sitting on a profit

By Jamie Nimmo For The Mail On Sunday

Published: | Updated:

A hedge fund has launched an attack on shares in Boohoo – the day after the fast fashion giant was accused of using sweatshop factories in Leicester.

PSQUARED Asset Management placed bets worth more than £20million that the AIM-listed firm’s shares would fall. It was the first time a short position has been disclosed in Boohoo since Covid-19 struck the UK.

Short sellers use contracts to sell stock and buy it back when the price falls, making a profit on the difference in price. Swiss-based PSQUARED emerged with a 0.55 per cent short position on Monday.

Shares fall: Value of the firm has dropped by £1.3billion, meaning PSQUARED will already be sitting on a profit

Boohoo denies any wrongdoing. But the value of the firm has since dropped by £1.3billion, meaning PSQUARED will already be sitting on a profit. On Friday, Standard Life Aberdeen sold its Boohoo shares, citing an ‘inadequate’ response to the allegations.

PSQUARED took a short position in NMC Health last year as it battled accusations of fraud. The company later collapsed.

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