Asos: Short sellers ramp up bets against former retail favourite as profits dwindle
Short sellers have been hiking their bets against Asos this month after the former e-commerce darling posted a hefty £296.7 loss in early November and slashed its sales forecasts.
Asos, which made hay through the pandemic as shoppers poured onto online retail platforms, has fallen on tougher times this year as costs soar and shoppers tighten their purse strings.
Bosses cut forecasts after its full year results in November and said sales would plummet some 15 per cent in 2024. According to its accounts for the year to September, revenue declined by 11 per cent to £3.5bn as customers scaled back on online shopping due to the cost of living crisis.
Short sellers have been swirling the beleaguered e-commerce outfit for months but the firm has now widened its lead as the most shorted stock on the London Stock Exchange, with 7.61 per cent of its stock now held short by investors, according to filings from the Financial Conduct Authority.
Short sellers borrow a stock, sell it and then buy it back on the cheap after the price falls, allowing them to pocket a profit.
The latest bet against Asos comes from SIH Partners, which opened a position against the company on 16th November.
A total of nine investment firms now hold positions against Asos. Arrowsmith holds the largest bet against the company, making up a total of 1.31 per cent of its total issued share capital.
The mounting interest from short sellers underscores the troubles facing Asos after a collapse in its value over the past year. Shares in the firm have fallen nearly around 80 per cent since it moved onto the main market in February last year.
Earlier this year, chief José Antonio Ramos Calamonte announced a slew of cost-cutting initiatives including reducing its marketing outreach to unprofitable customers.
The online retailer has also been trying to reduce the £1.1bn worth of stock it holds and cut down on its warehouse space to save cash.
Asos declined to comment.
Retailers have fallen into the sights of short sellers across the board as Brits rein in their spending. Asos rival Boohoo is the second most shorted firm listed in London, while DIY retailer Kingfisher is the fourth most bet-against company, behind Metro Bank.
| Company | Net short position (%) |
| Asos | 7.61 |
| Boohoo | 6.75 |
| Metro Bank | 6.4 |
| Kingfisher | 5.87 |
| Abrdn | 5.61 |