Short-sellers have a field day with Spain’s ‘Most Italian Bank’
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
Things have gotten so serious at Spain’s sixth biggest bank, Banco Popular, that The Wall Street Journal just christened it ‘Spain’s most Italian bank.’ It wasn’t meant as a compliment.
These days the bank’s second biggest block of shareholders are short-sellers. They include some of the biggest hedge funds on the planet, from UK-based Oxford Asset Management, which holds a short position of 0.53% of the banks’ total shares, and Marshall Wace (2.23%) to Connecticut-based behemoth AQR Capital Management (2.92%).
As of Nov 25, short-sellers held 8.6% of the bank’s capital. It was enough to attract the unwelcome attention of Spain’s market regulator, CNMV, which has so far refused to ban shorting of the stock but has launched an investigation into whether a group of insiders led by Mexican billionaire Antonio Del Valle is using underhand tactics to cheapen the stock in preparation for a takeover bid.
It’s certainly the largest short position the bank has ever faced and over four times the accumulated short positions at rival institutions like Banc Sabadell. It’s also just one percentage-point short of eclipsing the total holdings of the bank’s biggest shareholder, Sindicatura de Accionistas, which represents some 5,000 investors, including the powerful religious order, Opus Dei.
This post was published at Wolf Street on November 30, 2016.