Ocado has become the ‘most-shorted’ stock as short-sellers turn on the online grocer after it saw to a £501 million profit loss.
More than six percent of the grocer’s stock is currently out on loan to hedge funds – the highest in five years – which will make money if the share price falls.
The online supermarket is now top of the Financial Conduct Authority’s list of ‘most-shorted’ stocks in London.
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During the pandemic, Ocado’s shares soared as consumers continued to shop online.
However, last month, the online grocer reported sales fell 3.8% to £2.2bn in what it called a “challenging market” as the benefits of the trend towards online shopping sparked by the pandemic lockdowns wound down and shoppers flocked to discounters amid the rising cost of living.
Independent retail analyst Richard Hyman told This is Money: “If you look back before the pandemic then Ocado was often massively shorted – this is a return to form.”
He added: “I think the thing is that the market doesn’t have any of the confidence in Ocado’s business model that the leadership team and founders have.”
In other news, Ocado also launched its new Price Promise last month which compares prices against over 10,000 like for like products at Tesco.
