Wednesday 21 August 2019

Hedge fund Citadel raises short bet on Ryanair shares to €204m

Short position: Shares in Ryanair are being targeted by US hedge fund Citadel. Photo: Bloomberg
Short position: Shares in Ryanair are being targeted by US hedge fund Citadel. Photo: Bloomberg
John Mulligan

John Mulligan

US hedge fund giant Citadel is continuing to stalk Ryanair, boosting its short position again in the airline this week to €204m worth of the company’s stock.

The US and European arms of Citadel now hold a combined 1.7pc short position in the carrier, betting Ryanair’s shares will fall.

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Citadel has been steadily increasing its short exposure to Ryanair, as carriers in Europe face a challenging summer, with higher fuel costs and increased competition because of more available seats. Founded by chief executive Ken Griffin, Citadel has about $30bn (€26bn) of assets under management.

When investors short a share, they are betting that its price will drop. They borrow a company’s shares from

other shareholders and can profit if the price falls by buying back the shares at a lower price to return them to their original owner.

But short positions can turn sour if the share price in the target company rises.

Citadel reported the increased short position in Ryanair this week to the Central Bank of Ireland.  Under European Union rules, short positions greater than 0.5pc of a listed company’s stock must by publicly disclosed.

Last month, the Irish Independent first reported that US-based investor Harris Associates had become the single largest shareholder in Ryanair, with just over a 7pc stake in the carrier.

Irish Independent

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