Sainsbury (j) Share Discussion Threads

[spob] 28/1/2021 01:32

" making life more difficult for the investor class working hardest to keep markets honest "

HaHaHa... don't make me laugh

[spob] 28/1/2021 01:30

Hedge funds feel the heat as Pearson catches day-trader fever

Bearish bets unwound as US exuberance crosses the Atlantic


Bryce Elder

Lombard

Financial Times

27 January 2021




It is a measure of dysfunctional markets that day traders delivered a bigger return for Pearson shareholders within 90 minutes than John Fallon ever managed in seven years as chief executive.

An early morning pile-on lifted shares of the textbook publisher by nearly 20 per cent to their highest since July 2019. Had the long-rumoured private equity bid approach finally arrived? It appears not. Instead, Pearson was one of a handful of companies to catch the secondary effects of stonk-mania, the US-led fashion among retail investors for using collective brute force to soak up liquidity and pressure short-sellers into closing their bets.

Cineworld and Petrofac caught the same bug, as did J Sainsbury. A cinema chain, a refinery engineer and a grocer have little in common other than being among the most heavily shorted stocks on the London market, with Financial Conduct Authority data showing 8 per cent or more of their total share capital out on loan.

It is too easy, however, to write off these moves as a direct consequence of investment gamification via internet message boards and commission-free trading apps. Stock markets remain a niche pursuit for Britons, who have free access to many other forms of legal gambling, and the social media chatter on Wednesday gives no hint of a cross-border mob assembling that would have the heft to move FTSE 100 stocks. Yet more than 6m Pearson shares changed hands within the first three hours, about treble the daily average.

Instead, events on Wall Street appear to have triggered a broad and undifferentiated risk-off trade among hedge funds. Very few will have direct exposure to the likes of GameStop, a flagship investment for the day trader armies. But after Melvin Capital Management required a bailout for being on the wrong side of the GameStop trade, fellow hedge funds are facing higher borrowing costs and more constraining volatility metrics.

Do not expect much sympathy for the short-sellers. They make convenient villains, particularly on the internet forums that set the current mood. Yet in a market powered largely by algorithms and technical signals, the bears play a valuable role in improving corporate transparency and accountability. Financial incentives have helped expose numerous frauds, from Enron and Wirecard to NMC Health, as well as putting pressure on countless other companies to clean up their operations.

It is hard to know exactly how much credit to give the amateur trader armies for each day’s gyrations. Nevertheless, their involvement is making life more difficult for the investor class working hardest to keep markets honest, which is an unfortunate unintended consequence.

[spob] 28/1/2021 00:47

Sainsburys shares on loan currently around 8%

but that is just declared positions around 0.5% and above

total shares on loan for Sainsbury will obviously be higher

[spob] 28/1/2021 00:43

‘Short squeeze’ spreads as day traders hunt next GameStop


White House is ‘monitoring the situation’ after surge in targeted stocks on both sides of the Atlantic

European companies targeted by Reddit traders include Poland’s CD Projekt, maker of the Witcher series of video games, the pharmaceuticals group Evotec and the battery maker Varta


Robert Smith, Laurence Fletcher and Madison Darbyshire in London and Eric Platt in New York




Financial Times

27 January 2021



A “short squeeze” that started on Wall Street swept across the globe on Wednesday, triggering another day of frenetic moves in the share prices of companies with large bets levied against them.

The White House press secretary Jen Psaki said the Biden administration was “monitoring the situation” as shares of companies including GameStop, the hard-hit cinema owner AMC and BlackBerry surged in a volatile day of trading.

The dramatic moves highlight the growing influence of retail traders, who have organised on the message board site Reddit. The group has focused on pushing up stocks that are the subject of large short bets by hedge funds. Their success in rallying the stock price of GameStop has vindicated a group now targeting companies on both sides of the Atlantic.

Stocks such as US home goods retailer Bed Bath & Beyond, Finnish telecoms group Nokia, German pharmaceuticals company Evotec, former Financial Times owner Pearson and Polish games developer CD Projekt rose sharply in intraday trading.

Shares in AMC, which earlier this week clinched a rescue financing, rose 301 per cent on Wednesday, while the retailer Express more than tripled in value. GameStop, which has been at the centre of the retail trading bonanza, shot up 135 per cent.

We are recently detecting some European stocks being touted as 'the next GameStop’ among retail investors

Ivan Cosovic, Breakout Point

The gains stood in stark contrast to a broad market decline triggered by concerns about the rollout of vaccines and pandemic risks to the economy. The US S&P 500 index and tech-heavy Nasdaq Composite both slid 2.6 per cent.

“It’s like a wolf pack seeking out the weakest member of the herd,” said Steve Sosnick, chief strategist for Interactive Brokers.

The flash rallies prompted TD Ameritrade to put trading restrictions in place for several securities, including GameStop and AMC. The company said the limits could include restricting short sales or requiring 100 per cent margin for certain trades, moves it said would mitigate risks for itself and its clients.

“We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors,” the brokerage said.

The Securities and Exchange Commission on Wednesday said it was aware of the volatility across equity and options markets and it was “working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants”.

William Galvin, the Massachusetts secretary of the commonwealth who last month sued the trading platform Robinhood for “gamifying” investing and failing to protect its users, said trading in GameStop should be halted. “At the present time, the best action is to prevent this from being traded,” he told the Financial Times. (Robinhood has denied the allegations in the complaint from the Massachusetts securities division.)

Some of the companies whose shares surged were targets of Melvin Capital, a hedge fund that has been singled out by day traders. Those included Evotec, which was up 9.6 per cent; CD Projekt, which rose 5.3 per cent; and the German battery manufacturer Varta, which rose 12 per cent before trimming its gains to trade up 6.2 per cent.

Melvin on Wednesday revealed it had closed its GameStop position, having sustained a multibillion-dollar loss on its shorts since the start of this year.

Retail investors are using “a tried-and-true hedge fund strategy of swarming crowded trades held by weak-handed investors”, said Andrew Beer, managing member at fund firm Dynamic Beta Investments.

In contrast to the US, which has limited disclosure on short bets, hedge funds and other investors have to disclose when they have shorted more than 0.5 per cent of a company’s stock in the EU and the UK, making it easier to target a fund’s positions.

Melvin’s latest disclosure shows it has bet against more than 6 per cent of Evotec’s shares, making it the largest single wager against a European company by percentage of shares shorted, according to the data provider Breakout Point. The US hedge fund’s bet against Varta is the fifth largest.

The “short squeeze phenomenon fuelled by retail investors’ discussions is spilling over to Europe”, said Ivan Cosovic, founder of Breakout Point. “We are recently detecting some European stocks being touted as ‘the next GameStop’ among retail investors.”

The targeting of hedge funds will be viewed with irony by many financial market insiders, given that such funds are often the protagonists in short-selling attacks on troubled companies.

Heavily shorted shares with no link to Melvin also rose on Wednesday. Shares in Pearson, the British education publishing company that is the third-most shorted stock in Europe, according to IHS Markit, climbed 14 per cent to close at its highest level in 16 months. Daniel Sundheim’s New York-based hedge fund D1 Capital Partners, which has also been shorting Varta, has the biggest bet against Pearson, at 3.8 per cent of its share capital.

The real estate company Wereldhave, in which Woodson Capital has disclosed a 4.2 per cent short position and London-based Adelphi has a 3.6 per cent bet, rose about 5 per cent.

Hedge funds in Europe are now fervently scouring lists of most-shorted stocks and message boards such as Reddit for any signs that their short bets could be in trouble.

“Any good hedge fund group will be looking at this,” said the head of one multibillion-dollar European hedge fund group.

One European hedge fund manager who specialises in short selling described the recent stock market rallies as “insane”, but said the elevated share prices of troubled companies would “make a great opportunity” for short sellers that survived the week’s mayhem.

Additional reporting by Patrick Temple-West

[poikka] 27/1/2021 18:29

What's in a day.

[netcurtains] 27/1/2021 16:48

Not a brilliant ending to the day, but a profit is a profit - nice to be up.

[paulo435] 27/1/2021 11:13

Possibly on the banking side - the sale

[imperial3] 27/1/2021 11:00

Something cooking then?

[quepassa] 27/1/2021 10:54

Astonishing performance since September.

180p to 265p.

Wondering the same as several other posters.

Is something going on.

ALL IMO. DYOR.
QP

[netcurtains] 27/1/2021 10:02

I wouldn't be surprised if #RCH REACH takeover the Telegraph. The paper is up for sale (I Think).

[imperial3] 27/1/2021 09:59

ST. Thats old news now.

[poikka] 27/1/2021 09:50

So someone with a load of dosh in the Shetlands has just received his Sunday Telegraph :).

[harleymaxwell] 27/1/2021 09:47

There was a takeover article in the weekend tgraph

[sbb1x] 27/1/2021 09:42

Shorters getting hurt OnSbryPsonPfcCineThey are in top 10 shorted stocks

[nigelbarker] 27/1/2021 09:29

anything going on

[netcurtains] 27/1/2021 08:07

Pierre Oreilly: I read that it was porn and dark web that drive forward advances in Internet Technology so its pretty obvious the Internet, on the whole, is the enemy of civil society not its friend.

[pierre oreilly] 27/1/2021 07:54

Yeah imp, if things don't change the only thing left in our high streets will be charity shops, illegal Christmas tat shops and estate agents. Our villages are pretty scarce, and our town centres are going the same way.Tim berners Lee recently said the internet has been on Balance positive up to now, but is now turning generally negative. A broad brush, but I think included in that was the possible destruction of our high streets.

[netcurtains] 27/1/2021 07:47

spod: I know I am correct as I went to Argos counter and they said you had to order online first HOWEVER they said if you just order on your phone NOW they'll get it from the store room.
Seriously, provided ARGOS have it in stock you'll get it there and then.
Its pretty obvious really
ARGOS beats Amazon HANDS DOWN - provided they have it in stock (Which they normally do )

[spob] 26/1/2021 22:13

" Eg you can order in Sainsburys car park and by time you get into the store your Argos product is waiting for you "


more likely not

most times they will say, come back in 6 hours or tomorrow morning because we can't stock the full catalogue range in this tiny Argos, in the corner of a sainsburys supermarket

your product will then have to be shipped from a central depot or from the nearest proper argos shop to the tiny argos inside sainsburys

[imperial3] 26/1/2021 21:51

In today's Daily Mail by Ruth Sunderland business editor in an article entitled "Covid didn't kill the High Street giants.It was grotesque greed."

She said," The whole rotten system of business rates needs to be ripped up and replaced by a fairer levy.Online retailers should be taxed to reflect their turnover so they do not escape with tiny bills on multi-billion pound sales."

How right she is!! It is about time that Amazon should pay its fair share of tax.

[netcurtains] 26/1/2021 10:30

Typical example:
If you want to buy a typical Amazon product (say a DVD player because you've found some old DVDs and you'd like to play them).

With Amazon it will probably take at least 1 day to get that player.
With Argos you can get the DVD player within a few minutes.

Just order online then pick it up at your local store. Watch DVDs immediately
Why wait a day with Amazon???

[imperial3] 26/1/2021 10:14

Stop this unfair competitive advantage that Amazon has over Argos/Sainsbury's.They should be paying an appropiate rate of tax here.

[netcurtains] 26/1/2021 09:58

Sainsburys has about the best NAV value in the FTSE100 (for retailers).
Got to be a stonkingly good value buy.